US natural gas futures moved higher after production fell over the weekend, with the largest declines reported in the Appalachian shale fields. The reduction in supply may indicate that producers are curtailing output in response to low prices.
Weather forecasts also shifted slightly cooler, suggesting increased demand for natural gas used in furnaces and power plants as the winter heating season begins. However, the price gains are likely to remain limited by expectations of above-average temperatures across the United States in the coming weeks.
Flows to liquefied natural gas export terminals also decreased. That leaves more gas in the domestic market and applies downward pressure to prices, offsetting part of the support from lower production and higher projected heating demand.
Sources: Bloomberg Markets.