August Nymex natural gas (NGQ25) on Thursday closed down -0.009 (-0.25%).
Aug nat-gas prices on Thursday fell from a 2.5-week high and settled slightly lower after weekly EIA nat-gas supplies rose more than expected. The EIA reported that nat-gas inventories rose by +46 bcf in the week ended July 11, above expectations of +45 bcf. Nat-gas prices initially rallied on Thursday due to warmer US weather forecasts, which could boost nat-gas demand from electricity providers to meet increased air conditioning usage. Forecaster Vaisala said forecasts remain above normal for the July 22-26 period across the US, with highs in the mid-90s expected in the middle of the country and in the east for the second half of the period.
Lower-48 state dry gas production on Thursday was 107.2 bcf/day (+4.3% y/y), according to BNEF. Lower-48 state gas demand on Thursday was 80 bcf/day (-1.6% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Thursday were 15.3 bcf/day (-2.2% 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 12 rose +1.1% y/y to 98,133 GWh (gigawatt hours), and US electricity output in the 52-week period ending July 12 rose +2.4% y/y to 4,248,982 GWh.
Thursday’s weekly EIA report was slightly bearish for nat-gas prices since nat-gas inventories for the week ended July 11 rose +46 bcf, above the consensus of +45 bcf and the 5-year average of +41 bcf for the week. As of July 11, nat-gas inventories were down -4.9% y/y, but were +6.2% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of July 15, gas storage in Europe was 63% full, compared to the 5-year seasonal average of 72% 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.
