September Nymex natural gas (NGU25) on Monday closed down -0.026 (-0.89%).
Sep nat-gas prices on Monday settled lower on forecasts for cooler-than-normal US temperatures for mid to late August, which will reduce nat-gas demand from electricity providers to power air conditioning. Forecaster Atmospheric G2 said Monday that forecasts shifted cooler across the eastern two-thirds of the US and Southwest for August 23-27.
Nat-gas prices last Wednesday tumbled to a 9.25-month nearest-futures low on the outlook for higher US nat-gas production. Last Tuesday, the EIA raised 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.
US (lower-48) dry gas production on Monday was 109.2 bcf/day (+6.5% y/y), according to BNEF. Lower-48 state gas demand on Monday was 80.3 bcf/day (+6.7% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Monday were 14.3 bcf/day (-11.5% w/w), according to BNEF.
In a bearish factor, the Edison Electric Institute reported last Wednesday that US (lower-48) electricity output in the week ended August 9 fell -1.9% y/y to 93,293 GWh (gigawatt hours), although US electricity output in the 52-week period ending August 9 rose +2.6% y/y to 4,257,529 GWh.
Last Thursday’s weekly EIA report was slightly bearish for nat-gas prices since nat-gas inventories for the week ended August 1 rose +56 bcf, slightly above the consensus of +54 bcf and well above the 5-year weekly average of +33 bcf. As of August 8, nat-gas inventories were down -2.4% y/y, but were +6.6% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of August 16, gas storage in Europe was 74% full, compared to the 5-year seasonal average of 81% 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 15 fell by -1 to 122 rigs, slipping a bit farther from the 2-year high of 124 rigs posted on August 1. In the past year, the number of gas rigs has risen from the 4-year low of 94 rigs reported in September 2024.
