Sep Nymex natural gas (NGU24) on Friday closed down -0.001 (-0.05%).
Sep nat-gas prices on Friday fell to a new 3-month nearest futures low and closed slightly lower. The outlook for cooler US weather that will curb nat-gas demand from electricity providers to power air conditioning is weighing on prices. Forecaster Atmospheric G2 said Friday that the north-central and northeastern parts of the US are expected to have cooler temperatures for August 7-11. Nat-gas prices recovered most of their losses Friday after a fall in the dollar index (DXY00) to a 4-1/2 month low sparked short covering.
Lower-48 state dry gas production Friday was 102.8 bcf/day (+1.2% y/y), according to BNEF. Lower-48 state gas demand Friday was 84.3 bcf/day (+11.2% y/y), according to BNEF. LNG net flows to US LNG export terminals Friday were 13.1 bcf/day (+5.9% 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.
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 Friday that the number of active US nat-gas drilling rigs in the week ending August 2 fell -3 rigs to 98 rigs, just above the 3-year low of 97 rigs posted 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.
