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.
