U.S. natural gas production declined over the weekend; low prices may prompt producers to voluntarily cut output

U.S. natural gas futures prices have risen as natural gas production declined over the weekend, with the most significant reduction observed in the Appalachian shale gas region. The supply decrease suggests that producers may be proactively cutting output amid low natural gas prices. In addition, weather forecasts turning slightly cooler mean that, with the start of the winter heating season, demand for natural gas used for heating and power generation could increase. However, in the coming weeks, temperatures across most of the U.S. are still expected to remain above seasonal averages, which may limit the upside for natural gas prices and offset the additional support from marginal increases in heating demand. Furthermore, the volume of natural gas flowing to liquefied natural gas export terminals has also declined, leaving more gas in the domestic U.S. market and exerting downward pressure on prices.