On Friday, July Nymex natural gas (NGN26) closed down by $0.112 at $3.35, retreating from a three-month high. The decline followed long liquidation as the contract was set to expire.
Natural gas prices initially rose due to forecasts of above-average US temperatures, which could increase demand for electricity for air-conditioning. The Commodity Weather Group projects these temperatures will affect the Midwest and Northeast through July 5. US production was reported at 112.5 billion cubic feet per day (bcf/day), an increase of 4.7% year-over-year, while gas demand declined to 71.2 bcf/day, down 7.0% year-over-year.
Additionally, US LNG export terminal flows were estimated at 19.1 bcf/day, marking a 4.5% week-over-week increase. Despite projections of higher US production, supply constraints from global LNG sources, particularly the damaged Ras Laffan export plant in Qatar, are expected to provide medium-term support for prices.
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