Sep Nymex natural gas (NGU24) on Thursday closed down by -0.022 (-0.99%).
Sep nat-gas prices on Thursday fell back from a 3-1/2 week high and posted moderate losses on forecasts for cooler US temperatures, which will curb nat-gas demand from electricity providers to run air conditioning. The Commodity Weather Group said Thursday that forecasts have shifted cooler for the eastern part of the US for August 20-24.
Nat-gas prices on Thursday initially rallied to a 3-1/2 week high after weekly EIA nat-gas inventories unexpectedly fell -6 bcf, below expectations of +1 bcf and the first storage decline since 2016.
Last Monday, nat-gas prices tumbled to a 3-1/2 month nearest futures low on forecasts for cooler US weather amid elevated nat-gas stockpiles. Current US nat-gas supplies are abundant, with nat-gas inventories +13% above their 5-year seasonal average as of August 9.
Lower-48 state dry gas production Thursday was 102 bcf/day (+0.5% y/y), according to BNEF. Lower-48 state gas demand Thursday was 77 bcf/day (-1.9% y/y), according to BNEF. LNG net flows to US LNG export terminals Thursday were 12.7 bcf/day (+0.2% 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 Wednesday that total US electricity output in the week ended August 10 rose +2.55% y/y to 95,115 GWh (gigawatt hours), and US electricity output in the 52-week period ending August 10 rose +2.16% y/y to 4,150,379 GWh.
Thursday's weekly EIA report was bullish for nat-gas prices since nat-gas inventories for the week ended August 9 unexpectedly fell -6 bcf, below expectations of +1 bcf and well below the 5-year average build for this time of year of +43 bcf. Thursday's unexpected draw was the first decline in weekly nat-gas storage in 8 years. As of August 9, nat-gas inventories were up +6.5% y/y and were +13.0% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 88% full as of August 11, above the 5-year seasonal average of 79% 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 9 fell -1 rig to match the 3-year low of 97 rigs from June 28. Active rigs have fallen back since posting a 5-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.
