August Nymex natural gas (NGQ25) on Wednesday closed down -0.175 (-5.38%).
Aug nat-gas prices added to this week’s sharp losses on Wednesday and dropped to a 2.75-month low due to forecasts for cooler US weather, which would curb nat-gas demand from electricity providers for air conditioning usage. Forecaster Atmospheric G2 said Wednesday that forecasts shifted generally cooler across the US for August 2-6.
Don’t Miss a Day: From crude oil to coffee, sign up free for Barchart’s best-in-class commodity analysis.
Also, stronger US nat-gas output is weighing on prices with recent production up year-over-year. In addition, expectations for even higher US nat-gas production are also weighing on nat-gas prices after last Friday’s weekly report from Baker Hughes showed that the number of active US nat-gas drilling rigs in the week ending July 18 rose by +9 to a 17-month high of 117 rigs.
Lower-48 state dry gas production on Wednesday was 108.8 bcf/day (+4.5% y/y), according to BNEF. Lower-48 state gas demand on Wednesday was 79.5 bcf/day (-4.2% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Wednesday were 15.0 bcf/day (+1.0% w/w), according to BNEF.
An increase in US electricity output is positive for nat-gas demand from utility providers. The Edison Electric Institute reported Wednesday that total US (lower-48) electricity output in the week ended July 19 rose +2.1% y/y to 99,373 GWh (gigawatt hours), and US electricity output in the 52-week period ending July 19 rose +2.4% y/y to 4,251,059 GWh.
The consensus is that Thursday’s weekly EIA nat-gas inventories will increase by +27 bcf for the week ended July 18, just below the five-year average for the week at +30 bcf.
Last Thursday’s weekly EIA report was slightly bearish for nat-gas prices since nat-gas inventories for the week ended July 11 rose +46 bcf, above the consensus of +45 bcf and the 5-year average of +41 bcf for the week. As of July 11, nat-gas inventories were down -4.9% y/y, but were +6.2% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of July 21, gas storage in Europe was 65% full, compared to the 5-year seasonal average of 74% full for this time of year.
Baker Hughes reported last Friday that the number of active US nat-gas drilling rigs in the week ending July 18 rose by +9 to a 17-month high of 117 rigs. In the past ten months, the number of gas rigs has risen from the 4-year low of 94 rigs reported in September 2024.
On the date of publication,
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
For more information please view the Barchart Disclosure Policy
here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
