September Nymex natural gas (NGU25) on Tuesday fell sharply by -0.146 (-4.94%).
Sep nat-gas prices on Tuesday plunged to a 9-month low on the nearest-futures chart. Nat-gas prices fell on forecasts for cooler US temps. Atmospheric G2 said forecasts shifted cooler in the Northeast and Southeast for Aug 17-21, although forecasts trended warmer across the Midwest and Northeast for Aug 22-26.
Another bearish factor for nat-gas prices Tuesday was the EIA's hike in its forecast for 2025 US nat-gas production by +0.5% to 106.44 bcf/day from July's estimate of 105.9 bcf/day. The EIA raised its forecast for 2026 US nat-gas production by +0.7% to 106.09 from July's 105.4 bcf/day forecast. US nat-gas production is currently near a record high, with active US nat-gas rigs recently posting a 2-year high.
Lower-48 state dry gas production on Tuesday was 108.6 bcf/day (+5.6% y/y), according to BNEF. Lower-48 state gas demand on Tuesday was 78.2 bcf/day (+1.9% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Monday were 15.4 bcf/day (-3.7% 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 August 2 rose +0.9% y/y to 99,367 GWh (gigawatt hours), and US electricity output in the 52-week period ending August 2 rose +2.7% y/y to 4,259,351 GWh.
Last Thursday's weekly EIA report was bullish for nat-gas prices since nat-gas inventories for the week ended August 1 rose +7 bcf, below the consensus of +12 bcf and the 5-year average of +29 bcf for the week. As of August 1, nat-gas inventories were down -4.3% y/y, but were +5.9% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of August 9, gas storage in Europe was 72% full, compared to the 5-year seasonal average of 79% 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 August 8 fell by -1 to 123 rigs, slipping from the 2-year high of 124 rigs posted on August 1. In the past ten months, the number of gas rigs has risen from the 4-year low of 94 rigs reported in September 2024.
