On Friday, August Nymex natural gas (NGQ25) closed at $3.73, a rise of 6.04% (+$0.213), driven by forecasts of increased demand due to hotter weather across the US from July 7-11. According to Atmospheric G2, this change in temperature is expected to increase air conditioning usage significantly.
As of June 20, US natural gas inventories were reported at 6.6% above the five-year seasonal average, following a larger-than-expected build of 96 bcf compared to the consensus of 88 bcf. Lower-48 state dry gas production was recorded at 105.2 bcf/day (+1.7% year-over-year), with demand at 74.3 bcf/day (+1.0% year-over-year). Despite rises in production and inventory, Baker Hughes reported a decrease in active US natural gas drilling rigs by 2, totaling 109, slightly below the 15-month high of 114.
Electricity output in the US fell by 3.1% year-over-year during the week ending June 21, totaling 91,334 gigawatt-hours, although it showed a 2.6% increase over the previous 52-week period. This decline in electricity generation poses challenges for natural gas demand from utility providers.
