
August Nymex natural gas (NGQ25) on Wednesday closed up +0.028 (+0.79%), the third consecutive daily rise.
Aug nat-gas prices on Wednesday extended the week-long rally and posted a new 2-week high. The main bullish factor was warmer US weather forecasts, which would boost nat-gas demand from electricity providers to meet increased air conditioning usage. Atmospheric G2 said that forecasts shifted hotter in the eastern two-thirds of the US for July 21-25. The rest of the country also remains hot.
The consensus is for Thursday's weekly EIA report to show a +45 bcf increase, which would be above the 5-year average for the week of +41 bp.
Lower-48 state dry gas production on Wednesday was 106.6 bcf/day (+2.9% y/y), according to BNEF. Lower-48 state gas demand on Wednesday was 79.6 bcf/day (-5.9% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Wednesday were 15.1 bcf/day (+0.3% 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 last Wednesday that total US (lower-48) electricity output in the week ended July 5 rose +1.0% y/y to 93,747 GWh (gigawatt hours), and US electricity output in the 52-week period ending July 5 rose +2.4% y/y to 4,247,938 GWh.
Last Thursday’s weekly EIA report was bullish for nat-gas prices since nat-gas inventories for the week ended July 4 rose +53 bcf, below the consensus of +61 bcf and right on the 5-year average for the week. As of July 4, nat-gas inventories were down -6.0% y/y, but were +6.1% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of July 8, gas storage in Europe was 61% full, compared to the 5-year seasonal average of 71% 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 11 was unchanged at 108 rigs, slightly below the 15-month high of 114 rigs posted on June 6. In the past nine months, the number of gas rigs has risen from the 4-year low of 94 rigs reported in September 2024.