Sep Nymex natural gas (NGU24) on Wednesday closed down by -0.021 (-0.96%).
Sep nat-gas prices Wednesday closed lower for a second day on a mixed weather outlook. NatGasWeather said Wednesday that forecasts have shifted hotter for most of the US from August 26-September 4, which should boost nat-gas demand from electricity providers to run air conditioning. However, temperatures for the Great Lakes and New England for that same timeframe are expected to cool.
Lower-48 state dry gas production Wednesday was 99.7 bcf/day (-2.4% y/y), according to BNEF. Lower-48 state gas demand Wednesday was 73.7 bcf/day (-7.7% y/y), according to BNEF. LNG net flows to US LNG export terminals Wednesday were 13.1 bcf/day (+6.7% 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 17 rose +0.43% y/y to 92,551 GWh (gigawatt hours), and US electricity output in the 52-week period ending August 17 rose +2.03% y/y to 4,150,777 GWh.
The consensus is that Thursday's weekly EIA nat-gas inventories will increase by +22 bcf, a smaller build than the five-year average for this time of year of +41 bcf.
Last 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 90% full as of August 18, above the 5-year seasonal average of 82% 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 16 rose +1 rig to 98 rigs, just above the 3-year low of 97 rigs from August 9 and 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.
