On Wednesday, September Nymex natural gas closed at $2.80, up 1.34% (+$0.037). Forecasts continue to predict warmer-than-average temperatures for the Midwest and South from August 17-21, and above-normal temperatures in the West from August 22-26, likely influencing demand.
The US Energy Information Administration (EIA) projects nat-gas storage levels will reach 3,985 billion cubic feet (bcf) by the end of October, the highest in a decade, and 5% above the five-year average. Currently, US nat-gas inventories are 6.7% above their five-year seasonal average, indicating strong supplies. On August 9, the US dry gas production stood at 112.7 bcf/day, a 3.2% increase year-over-year, while gas demand was down to 82.2 bcf/day, a 3.1% decline year-over-year.
Additionally, the Baker Hughes report indicated a decline in active US nat-gas drilling rigs, dropping by three to 124 rigs, while LNG net flows to US export terminals decreased to 18.3 bcf/day, a 1.4% week-over-week decline. The upcoming EIA report is expected to show a 31 bcf increase for the week ending August 7, just shy of the five-year average of 33 bcf.
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