On Monday, August Nymex natural gas (NGQ25) closed at $2.99, down -0.122 (-3.92%), reaching a three-month low following cooler weather forecasts in the U.S. that are expected to reduce demand from electricity providers for air conditioning. Forecaster Vaisala projected cooler temperatures for the eastern half of the U.S. between August 2-6.
U.S. natural gas production has also increased, which is exerting downward pressure on prices. As of July 25, the number of active U.S. natural gas drilling rigs rose by +5 to a nearly two-year high of 122. Daily dry gas production on Monday was 108.6 billion cubic feet (bcf), up +4.1% year-over-year, while demand stood at 82.8 bcf, an increase of +11.5% year-over-year, according to BNEF.
Additionally, estimated LNG net flows to U.S. export terminals on Monday were 15.0 bcf, showing a week-over-week increase of +1.9%. As of July 18, natural gas inventories were down -4.8% year-over-year but +5.9% above the five-year seasonal average, indicating adequate supplies.
