Nat-Gas Prices Erase Early Gains as Weekly EIA Inventories Build

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6 days ago

August Nymex natural gas (NGQ25) on Thursday closed down -0.009 (-0.25%).
Aug nat-gas prices on Thursday fell from a 2.5-week high and settled slightly lower after weekly EIA nat-gas supplies rose more than expected. The EIA reported that nat-gas inventories rose by +46 bcf in the week ended July 11, above expectations of +45 bcf. Nat-gas prices initially rallied on Thursday due to warmer US weather forecasts, which could boost nat-gas demand from electricity providers to meet increased air conditioning usage. Forecaster Vaisala said forecasts remain above normal for the July 22-26 period across the US, with highs in the mid-90s expected in the middle of the country and in the east for the second half of the period.
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Lower-48 state dry gas production on Thursday was 107.2 bcf/day (+4.3% y/y), according to BNEF. Lower-48 state gas demand on Thursday was 80 bcf/day (-1.6% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Thursday were 15.3 bcf/day (-2.2% 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 (lower-48) electricity output in the week ended July 12 rose +1.1% y/y to 98,133 GWh (gigawatt hours), and US electricity output in the 52-week period ending July 12 rose +2.4% y/y to 4,248,982 GWh.
Thursday's weekly EIA report was slightly bearish for nat-gas prices since nat-gas inventories for the week ended July 11 rose +46 bcf, above the consensus of +45 bcf and the 5-year average of +41 bcf for the week. As of July 11, nat-gas inventories were down -4.9% y/y, but were +6.2% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of July 15, gas storage in Europe was 63% full, compared to the 5-year seasonal average of 72% 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 July 11 was unchanged at 108 rigs, slightly below the 15-month high of 114 rigs posted on June 6. In the past nine months, the number of gas rigs has risen from the 4-year low of 94 rigs reported in September 2024.
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. This article was originally published on Barchart.com