August Nymex natural gas (NGQ26) on Wednesday closed down -0.055 (-1.68%).
Nat-gas prices fell on Wednesday amid expectations of a larger-than-average build in weekly storage levels. The consensus is that Thursday’s weekly EIA nat-gas inventories will climb by +83 bcf in the week ended June 26, well above the five-year average for the week of +64 bcf.
Don’t Miss a Day: From crude oil to coffee, sign up free for Barchart’s best-in-class commodity analysis.
Losses in nat-gas prices accelerated on Wednesday after weather forecasts shifted to show cooler temperatures in the coming weeks, potentially reducing nat-gas demand from electricity providers to power air-conditioning. The Commodity Weather Group on Wednesday said forecasts shifted cooler, with normal seasonal weather expected across the eastern US from July 6-15.
US (lower-48) dry gas production on Wednesday was 110.5 bcf/day (+1.7% y/y), according to BNEF. Lower-48 state gas demand on Wednesday was 80.2 bcf/day (+4.0% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Wednesday were 19.2 bcf/day (+0.7% w/w), according to BNEF.
Projections for higher US nat-gas production are negative for prices. On June 9, the EIA raised its forecast for 2026 US dry nat-gas production to 111.0 bcf/day from a May estimate of 110.6 bcf/day.
Nat-gas prices have medium-term support on the outlook for tighter global LNG supplies. On March 19, Qatar reported “extensive damage” at the world’s largest natural gas export plant at Ras Laffan Industrial City. Qatar said the attacks by Iran damaged 17% of Ras Laffan’s LNG export capacity, damage that will take three to five years to repair. The Ras Laffan plant accounts for about 20% of global liquefied natural gas supply, and a reduction in its capacity could boost US nat-gas exports.
As a negative factor for gas prices, the Edison Electric Institute on Wednesday reported that US (lower-48) electricity output in the week ended June 27 fell -8.27% y/y to 91,142 GWh (gigawatt hours). However, US electricity output in the 52 weeks ending June 27 rose +2.18% y/y to 4,339,625 GWh.
Last Thursday’s weekly EIA report was bearish for nat-gas prices, as nat-gas inventories for the week ended June 19 rose by +76 bcf, above expectations of +69 bcf and above the 5-year weekly average of +75 bcf. As of June 19, nat-gas inventories were down -2.2% y/y, and +5.7% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of June 29, gas storage in Europe was 49% full, compared to the 5-year seasonal average of 64% full for this time of year.
Baker Hughes reported last Friday that the number of active US nat-gas drilling rigs in the week ending June 26 rose by +3 to 125 rigs, moderately below the 2.5-year high of 134 rigs set in February 2026.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
- AI Power Stocks Could Be a Once-in-a-Generation Trade. Start With the Companies Behind Every Data Center.
- Forget SpaceX. This Might Be the Hottest IPO of the Year.
- Global LNG Demand Is Rising. This Stock Just Hit New Record Highs as a Result.
- Will Differentials Between U.S. and European/Asian Natural Gas Prices Support U.S. Prices?
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
