August Nymex natural gas (NGQ25) on Friday closed up +0.016 (+0.52%).
Aug nat-gas prices recovered from early losses Friday and settled higher after US weather forecasts shifted to warmer, which would boost nat-gas demand from electricity providers for air conditioning usage. Forecaster Atmospheric G2 said Friday that forecasts shifted warmer across the central and eastern US for August 4-8.
Nat-gas prices on Friday initially moved lower on strength in US nat-gas output 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 Friday's weekly report from Baker Hughes showed that the number of active US nat-gas drilling rigs in the week ending July 25 rose by +5 to a nearly 2-year high of 122 rigs.
Lower-48 state dry gas production on Friday was 107.2 bcf/day (+3.1% y/y), according to BNEF. Lower-48 state gas demand on Friday was 80.9 bcf/day (+0.9% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 14.7 bcf/day (-5.4% 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.
Thursday's weekly EIA report was bullish for nat-gas prices since nat-gas inventories for the week ended July 18 rose +23 bcf, below the consensus of +27 bcf and the 5-year average of +30 bcf for the week. As of July 18, nat-gas inventories were down -4.8% y/y, but were +5.9% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of July 22, gas storage in Europe was 66% full, compared to the 5-year seasonal average of 74% full for this time of year.
Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ending July 25 rose by +5 to a nearly 2-year high of 122 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, Rich Asplund 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.
