August Nymex natural gas (NGQ26) on Tuesday closed down -0.105 (-3.79%).
Nat-gas prices retreated for a fourth straight session on Tuesday and posted a 3-month nearest-futures low. Prices are under pressure as weather models shifted to show a cooler Midwest and East Coast in the near term, reducing the need for air conditioning. The Commodity Weather Group said on Tuesday that forecasts call for normal to below-normal temperatures across the central and eastern US through August 5.
A bearish factor for nat-gas prices in the medium term is speculation that a powerful El Niño weather system will bring warmer-than-normal temperatures to the Northern Hemisphere this fall and winter, reducing nat-gas heating demand.
US (lower-48) dry gas production on Tuesday was 112.3 bcf/day (+1.9% y/y), according to BNEF. Lower-48 state gas demand on Tuesday was 84.0 bcf/day (-2.8% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Tuesday were 18.1 bcf/day (+2.4% w/w), according to BNEF.
Projections for higher US nat-gas production are negative for prices. On July 7, the EIA raised its forecast for 2026 US dry nat-gas production to 111.2 bcf/day from a June estimate of 111.0 bcf/day.
As a positive factor for gas prices, the Edison Electric Institute reported last Wednesday that US (lower-48) electricity output in the week ended July 18 rose +2.0% y/y to 101,391 GWh (gigawatt hours). Also, US electricity output in the 52 weeks ending July 18 rose +2.3% y/y to 4,350,346 GWh.
Last Thursday's weekly EIA report was mixed for nat-gas prices, as nat-gas inventories for the week ended July 17 rose by +32 bcf, less than expectations of +34 bcf but above the 5-year weekly average increase of +30 bcf. As of July 17, nat-gas inventories were down -0.6% y/y, and +6.4% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of July 25, gas storage in Europe was 55% full, compared to the 5-year seasonal average of 71% 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 24 rose by +1 rig to 127 rigs, below the 3-year high of 134 rigs set in February 2026.
