U.S. natural gas futures reached a seven-week high on Friday. The June front-month contract climbed 2.5% to settle at $2.967 per million British thermal units. Prices rose as domestic production declined, tightening the overall supply outlook.
Average gas output in the Lower 48 states fell throughout May. Daily production dropped by 2.5 billion cubic feet per day (bcfd) over the last five days to a preliminary 14-week low of 107.6 bcfd. These supply reductions were concentrated in Arkansas and Louisiana.
Lower output is expected to reduce the current natural gas storage surplus. The front-month contract gained approximately 7% over the week. This shift in market sentiment pushed the June contract into technically overbought territory for the first time since early May.