18 hours ago
Nat-Gas Prices Surge in Anticipation of Hot US Weather
August Nymex natural gas (NGQ25) on Friday closed sharply higher by +0.213 (+6.04%).
Aug nat-gas prices on Friday rallied sharply in anticipation of hotter US weather boosting nat-gas demand from electricity providers to power increased air-conditioning usage. Forecaster Atmospheric G2 said Friday that forecasts shifted warmer for most of the US for July 7-11, except for the southern tier and West Coast.
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Nat-gas prices sank to a 1-month nearest-futures low Thursday on a larger-than-expected build in weekly EIA inventories. As of June 20, nat-gas inventories were +6.6% above their 5-year seasonal average, signaling adequate nat-gas supplies. The easing of geopolitical risks also undercut nat-gas prices this week due to the Israel-Iran ceasefire. The ceasefire reduces the likelihood that Iran will close the Strait of Hormuz and disrupt LNG shipments through that Strait, which accounts for approximately 20% of global LNG trade.
Lower-48 state dry gas production on Friday was 105.2 bcf/day (+1.7% y/y), according to BNEF. Lower-48 state gas demand on Friday was 74.3 bcf/day (+1.0% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 14.8 bcf/day (+7.4% 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 (lower-48) electricity output in the week ended June 21 fell -3.1% y/y to 91,334 GWh (gigawatt hours), although US electricity output in the 52-week period ending June 21 rose +2.6% y/y to 4,243,923 GWh.
Thursday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended June 20 rose +96 bcf, above the consensus of +88 bcf and the 5-year average for the week of +79 bcf. As of June 20, nat-gas inventories were down -6.6% y/y, but were +6.6% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of June 23, gas storage in Europe was 57% full, compared to the 5-year seasonal average of 66% full for this time of year.
Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ending June 27 fell by -2 to 109 rigs, slightly below the 15-month high of 114 rigs from June 6. In the past nine months, gas rigs have risen from the 4-year low of 94 rigs posted 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
