August Nymex natural gas (NGQ25) on Tuesday closed down by -0.072 (-2.11%).
Aug nat-gas prices on Tuesday moved sharply lower after weather forecasts cooled in the central and eastern US, which will reduce nat-gas demand from energy providers to power air-conditioning usage. Forecaster Atmospheric G2 said Tuesday that forecasts shifted cooler over the middle of the country for July 13-17 and cooler for the eastern half of the US for July 18-22.
On Monday, nat-gas prices tumbled to a 6-week low due to robust US nat-gas supplies. Last Thursday's weekly EIA inventory report showed nat-gas supplies rose more than expected for the week ended June 27 and remained plentiful, at 6.2% above the 5-year average.
Lower-48 state dry gas production on Tuesday was 104.8 bcf/day (+3.9% y/y), according to BNEF. Lower-48 state gas demand on Tuesday was 77.9 bcf/day (-6.8% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Tuesday were 15.0 bcf/day (-2.5% 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 June 28 rose +3.2% y/y to 99,357 GWh (gigawatt hours), and US electricity output in the 52-week period ending June 28 rose +2.5% y/y to 4,246,983 GWh.
Last Thursday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended June 27 rose +55 bcf, above the consensus of +49 bcf but below the 5-year average for the week of +61 bcf. As of June 27, nat-gas inventories were down -5.8% y/y, but were +6.2% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of July 6, gas storage in Europe was 61% full, compared to the 5-year seasonal average of 70% full for this time of year.
Baker Hughes reported last Thursday that the number of active US nat-gas drilling rigs in the week ending July 4 fell by -1 to 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.
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.
