Sep Nymex natural gas (NGU24) on Monday closed down by -0.066 (-3.26%).
Sep nat-gas prices Monday moved lower for the fifth consecutive session and posted a 2-1/2 week low. Over the past week, nat-gas prices have been under pressure due to robust supplies and forecasts for moderate temperatures that will reduce nat-gas demand from electricity providers to run air conditioning. US nat-gas supplies as of August 16 were +12.6% above their 5-year average. The Commodity Weather Group said Monday that a short-lived heat wave for the Midwest and East Coast this week will give way to cooler temperatures from September 5-9.
Lower-48 state dry gas production Monday was 101.5 bcf/day (-1.2% y/y), according to BNEF. Lower-48 state gas demand Monday was 76.2 bcf/day (+1.2% y/y), according to BNEF. LNG net flows to US LNG export terminals Monday were 13.0 bcf/day (+2.0% 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 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.
Last Thursday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended August 16 rose +35 bcf, above expectations of +25 bcf but below the 5-year average build for this time of year of +41 bcf. As of August 16, nat-gas inventories were up +7.0% y/y and were +12.6% 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 23 fell by -1 rig to match 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.
