A sharp drop in reported volumes flowing to U.S. liquefied natural gas (LNG) export facilities kept the pressure on Henry Hub futures in early trading Monday. The July Nymex contract was down 7.6 cents to $1.773/MMBtu at around 8:40 a.m. ET.

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Heading into Monday’s trading, EBW Analytics Group analysts attributed the selling in the natural gas market to a “steep decline” in LNG feed gas flows. The firm estimated a 2 Bcf/d decrease in LNG feed gas since last week.

“This drop in feed gas flows, if it persists, could signal another major leg down in the market, since it could lead to a major further increase in the storage surplus versus last year and five-year average levels,” the EBW analysts said. “Gas prices could drop to $1.50 or lower later this month.”

Genscape Inc. estimated a 1.76 Bcf/d day/day decline in LNG feed gas volumes, including a 1.96 Bcf/d day/day drop in demand from facilities operated by Cheniere Energy Inc., the largest U.S. exporter.

“Based on evening cycle for June 1 flows, gas nominations have declined from 5.89 Bcf/d to 4.12 Bcf/d, with the the largest declines observed at Corpus Christi LNG (down 592 MMcf/d) and Sabine Pass LNG (down 1,361 MMcf/d),” Genscape analysts Preston Fussee-Durham and Allison Hurley wrote in a note to clients early Monday.

“These precipitous declines come after an end-of-the-month head-fake as LNG feed gas deliveries rebounded sharply off of last Sunday’s lows of 5.32 Bcf/d to weekly highs of just over 6.2 Bcf/d” last Tuesday and Thursday.

Meanwhile, compared to Friday’s expectations, weather models as of early Monday showed an overall net drop in gas-weighted degree days during the 15-day outlook period, including cooler trends this weekend into next week, Bespoke Weather Services said.

“This week’s heat is stronger in the West and a little quicker coming eastward into the Midwest, but a weak trough drops into the Northeast at the end of the week, cooling temperatures back toward normal there, and we also have the risk of a tropical system impacting the Gulf Coast this weekend or early next week, promoting cooler risks in its path,” Bespoke said. “There remains a good deal of uncertainty regarding where the impact would be, with anything from Texas to the Florida panhandle on the table if something forms.

“Overall, this remains an above-normal demand pattern, which we expect to be the theme for June as a whole.”

July crude oil futures were trading 28 cents lower at $35.21/bbl at around 8:40 a.m. ET, while July RBOB gasoline was up fractionally to $1.0812/gal.