The price of natural gas fell nearly 5% on Monday, as lower U.S. LNG exports threaten to exacerbate inventories, which are already significantly higher than the five-year average.

The price of natural gas was just $1.636 as of 4:27pm EDT, a drop pf $0.082 or 4.77%.

The EIA reported that U.S. LNG exports fell week over week for the week ending July 15, with just four vessels with a combined carrying capacity of 15 Bcf leaving the United States that week. This is the lowest volume since the end of 2016—a time when the Sabine Pass LNG was the only LNG export facility in the United States, according to FX Empire.

Last year at this time, natural gas deliveries to U.S. LNG export facilities were setting records, according to the EIA. This year, the pandemic is cramping the style for the cleaner fuel, and inventories are well above the five-year average, at 3.178 billion cubic feet as of July 10. That compares to the year ago levels of 2.515 Bcf, and the five-year average of 2.742 Bcf.

But the low prices did little to assuage Chevron’s appetite for Houston-based energy producer Noble Energy, who is embedded with natural gas in a major Israeli gas project, Leviathan.

Chevron’s CEO sees the near-term oil market as “cloudy”.

“The crystal ball is cloudy right now. There’s so much uncertainty on the trajectory of the pandemic, the rate of development of effective vaccines and government policy interventions to try to manage risk between here and there. It’s a fluid environment. We expect choppy economic and price activity,” Chevron CEO Mike Wirth said in an interview with Reuters.

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Chevron does see long-term demand growth for natural gas, however, largely from population growth and the push to lower greenhouse gas emissions.

By Julianne Geiger for Oilprice.com

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