August Nymex natural gas (NGQ25) on Monday closed down -0.240 (-6.73%).
Aug nat-gas prices plunged to a 1-week low Monday on the outlook for cooler US temperatures, which will curb nat-gas demand from electricity providers to provide increased air-conditioning usage. Forecaster Vaisala said forecasts shifted cooler in the West for July 26-30, and an active storm track could signal cooler risks in the Midwest and Northeast for July 31 to August 4.
Expectations for higher US nat-gas production are also weighing on nat-gas prices after last Friday’s weekly report from Baker Hughes showed that the number of active US nat-gas drilling rigs in the week ending July 18 rose by +9 to a 17-month high of 117 rigs.
Lower-48 state dry gas production on Monday was 107.4 bcf/day (+4.8% y/y), according to BNEF. Lower-48 state gas demand on Monday was 77.7 bcf/day (1.6% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Monday were 14.9 bcf/day (-4.9% 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 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.
Last 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 17, gas storage in Europe was 65% full, compared to the 5-year seasonal average of 73% 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 18 rose by +9 to a 17-month high of 117 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. This article was originally published on Barchart.com
