The price of natural gas on futures markets here in the U.S. has been falling all week. By Friday afternoon, it had declined about 25% since Wednesday of last week. It hasn’t been this low since back in July. 

Why? Well, this week, the Energy Information Administration reported that we’ve been building up a bigger-than-expected supply of gas in storage. Last week alone, we socked away more than we have any week since May of last year.

That’s the why. What about the how?

Let’s start with an explosion, one that happened in June at a liquefied natural gas export facility in Freeport, Texas. No one was hurt, but exports were interrupted.

“That facility uses about 2% of U.S. gas supply,” said Jacques Rousseau, managing director at ClearView Energy Partners. “And so, that gas has been redirected in the market, and it has not been shipped overseas.”

The weather also hasn’t been as hot lately. Less air conditioning means less demand for natural gas to generate electricity, observed Eugene Kim at Wood Mackenzie.

“All this is occurring while supply, U.S. gas production is at record levels,” Kim said.

Production is up because prices have been relatively high. That supply buildup is a good sign for consumers, said Anna Mikulska at Rice University.

“That hopefully means that, if we do have a cold winter, we will have storage filled to the point that it won’t give us trouble or at least won’t impact our prices too much.”

It might not be good news for Europe, which really needs natural gas to replace the lost supply from Russia.

Mikulska said that’s because the U.S. is already liquefying and exporting as much as possible. “Just as U.S. is constrained with infrastructure when it comes to export of LNG, Europe is also constrained by infrastructure to import LNG.”

Europe’s natural gas supplies might not last through the winter, she added.