August Nymex natural gas (NGQ24) on Friday closed down by -0.099 (-4.09%).  

Aug nat-gas prices Friday declined for the eighth consecutive session and posted a 7-week low.  Nat-gas prices remain under pressure due to abundant supplies as US nat-gas inventories as of June 28 were +18.8% above their 5-year seasonal average.    Also, weather forecasts have been trending cooler in the US, which will curb nat-gas demand from electricity providers to run air-conditioning.  The Commodity Weather Group said Wednesday that forecasts moved cooler for the central part of the US for July 8-12.  

The outlook for hot summer temperatures in the US is a bullish factor for nat-gas prices.  The National Weather Service (NWS) said on June 11 that "the vast majority of the lower 48 US states could see above-average temperatures for the next three months, and for a good portion of states, a hotter-than-normal summer is the most likely scenario."

Lower-48 state dry gas production Friday was 102.2 bcf/day (-0.2% y/y), according to BNEF.  Lower-48 state gas demand Friday was 77 bcf/day (+3.1% y/y), according to BNEF.  LNG net flows to US LNG export terminals Friday were 13 bcf/day (+2.4% 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 June 29 rose +7.2% y/y to 96,297 GWh (gigawatt hours), and US electricity output in the 52-week period ending June 29 rose +2.01% y/y to 4,144,116 GWh.

Wednesday's weekly EIA report was neutral for nat-gas prices since nat-gas inventories for the week ended June 28 rose by +32 bcf, close to expectations of +31 bcf but below the 5-year average build for this time of year of +69 bcf.  However, as of June 28, nat-gas inventories were up +8.8% y/y and were +18.8% above their 5-year seasonal average, signaling ample nat-gas supplies.  In Europe, gas storage was 77% full as of June 30, above the 5-year seasonal average of 67% full for this time of year.

Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ending July 5 rose +4 rigs to 101 rigs, recovering from the prior week's 2-3/4 year low of 97 rigs.  Active rigs have fallen since climbing to a 4-3/4 year high of 166 rigs in Sep 2022 from the pandemic-era record low of 68 rigs posted in July 2020 (data since 1987).
 



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