Sep Nymex natural gas (NGU24) on Tuesday closed down by -0.052 (-2.66%).

Sep nat-gas prices Tuesday closed lower for the sixth consecutive session and posted a 4-month nearest-futures 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.  Maxar Technologies said Tuesday that forecasts are trending cooler across the eastern half of the US for September 1-5.  

Lower-48 state dry gas production Tuesday was 102 bcf/day (+0.6% y/y), according to BNEF.  Lower-48 state gas demand Tuesday was 79.7 bcf/day (+7.3% y/y), according to BNEF.  LNG net flows to US LNG export terminals Tuesday were 12.7 bcf/day (-1.6% 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).
 



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  • Nat-Gas Prices Weighed Down by a Mixed Weather Outlook

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