Sep Nymex natural gas (NGU24) on Thursday closed down -0.068 (-3.34%).
Sep nat-gas prices on Thursday gave up an early advance and fell to a new 3-month nearest futures low. Forecasts for cooler US temperatures that will reduce nat-gas demand from electricity providers to power air conditioning undercut prices. Forecaster Maxar Technologies said Thursday that cooler weather is expected in the Northeast and the northern Midwest from August 8-15.
Gas prices Thursday initially moved higher after weekly EIA nat-gas inventories rose +18 bcf, below expectations of a +31 bcf gain. Nat-gas prices also had early carryover support Thursday from a rally in European nat-gas prices to a 1-3/4 month high.
Lower-48 state dry gas production Thursday was 102.7 bcf/day (+0.5% y/y), according to BNEF. Lower-48 state gas demand Thursday was 84 bcf/day (+11.3% y/y), according to BNEF. LNG net flows to US LNG export terminals Thursday were 12.2 bcf/day (-5.6% w/w), according to BNEF.
A decline in US electricity output is negative for nat-gas demand from utility providers. The Edison Electric Institute reported Wednesday that total US electricity output in the week ended July 27 fell -6.23% y/y to 91,383 GWh (gigawatt hours), although US electricity output in the 52-week period ending July 27 rose +2.03% y/y to 4,144,884 GWh.
The consensus is for Thursday's weekly EIA nat-gas inventories to climb by +31 bcf, just below the five-year average for this time of year of +33 bcf.
Thursday's weekly EIA report was bullish for nat-gas prices since nat-gas inventories for the week ended July 26 rose by +18 bcf, below expectations of +31 bcf and below the 5-year average build for this time of year of +33 bcf. As of July 26, nat-gas inventories were up +8.3% y/y and were +15.7% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 84% full as of July 28, above the 5-year seasonal average of 75% 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 26 fell -2 rigs to 101 rigs, modestly above the 2-3/4 year low of 97 rigs posted June 28. Active rigs have fallen back since posting a 4-3/4 year high of 166 rigs in Sep 2022, up from the pandemic-era record low of 68 rigs posted in July 2020 (data since 1987).
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. For more information please view the Barchart Disclosure Policy here.
