Natural Gas Futures Market News and Commentary
Aug Nymex natural gas (NGQ19) on Tuesday closed down -0.102 (-4.24%) at a 1-week low. Nat-gas prices sold off Tuesday for a second day and posted a 1-week low as excessive temperatures across the U.S. are expected to fade starting July 26, which should curb nat-gas demand for air-conditioning. The Commodity Weather Group said Monday that temperatures will be above normal across most of the U.S. over the next 10 days but will fall back to normal during July 25-29. Another bearish factor is above-average builds in weekly nat-gas supplies as this Thursday's weekly EIA nat-gas inventories report is expected to increase by 71 bcf, higher than the 5-year average of 63 bcf and the sixteenth straight week that U.S. nat-gas supplies would increase by more than the 5-year average. Nat-gas prices are also being undercut by robust U.S. nat-gas output as Tuesday’s data showed that U.S. lower 48-state nat-gas production rose +5.2% y/y to 83.129 bcf. Last Thursday's weekly EIA inventory data was bearish as U.S. nat-gas inventories rose by 81 bcf the week of July 5, above expectations of 74 bcf and above the 5-year average of 71 bcf. U.S. nat gas inventories have now increased by more than the 5-year average for fifteen consecutive weeks. Last Thursday's EIA data showed that U.S. nat-gas supplies stood at a 5-3/4 month high of 2.471 bcf as of July 5, up +12.2% y/y but -5.4% below the 5-year average.