On Monday, July Nymex natural gas (NGN25) closed at $3.62, a decline of $0.149 (3.94%), reaching a one-week low due to abundant U.S. supplies and expectations for increased production. As of May 30, U.S. natural gas inventories were 4.7% above the five-year seasonal average, while active U.S. natural gas rigs climbed to a 15-month high of 114 rigs, according to Baker Hughes.
On the same day, Lower-48 states’ dry gas production was 105.6 billion cubic feet per day (bcf/day), up 3.4% year-over-year, while demand was 69.9 bcf/day, a rise of 4.7% year-over-year. LNG net flows to U.S. export terminals reached 13.6 bcf/day, reflecting a weekly increase of 2.7%. However, a decline in electricity output, which fell 1.8% year-over-year to 76,711 gigawatt hours, may negatively impact natural gas demand for electricity generation.
Furthermore, the most recent EIA report indicated that natural gas inventories rose by 122 bcf for the week ending May 30, exceeding expectations and the five-year average build of 98 bcf. In Europe, gas storage was reported at 49% full, compared to a 60% seasonal average.
