September Nymex natural gas (NGU25) on Thursday closed down -0.010 (-0.32%).
Sep nat-gas prices on Thursday fell from a 1-week high and settled slightly lower after US weather forecasts cooled, which will curb nat-gas demand from electricity providers to power air conditioning. Forecaster Vaisala said Thursday that the Global Forecast System weather model shifted cooler for the eastern half of the US for August 17-21.
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Nat-gas prices on Thursday initially jumped to a 1-week high after weekly EIA nat-gas inventories rose only +7 bcf for the week ended August 1, below expectations of +12 bcf and the five-year average for this time of year of +29 bcf.
On Monday, nat-gas prices sank to a 3.5-month low on higher US nat-gas production and the outlook for even higher output in the near term. Baker Hughes reported last Friday that the number of active US nat-gas drilling rigs in the week ending August 1 rose by +2 rigs to a 2-year high of 124 rigs.
Lower-48 state dry gas production on Thursday was 108.7 bcf/day (+5.7% y/y), according to BNEF. Lower-48 state gas demand on Thursday was 78 bcf/day (-2.8% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Thursday were 15.5 bcf/day (+10.1% 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 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.
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 5, gas storage in Europe was 70% full, compared to the 5-year seasonal average of 78% 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 1 rose by +2 to a 2-year high of 124 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.
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