Nat-Gas Prices Fall as Cooler Temps Forecast for the US

July Nymex natural gas (NGN26) on Tuesday closed down -0.106 (-3.26%).

Nat-gas prices retreated on Tuesday amid forecasts for cooler US summer weather, which could potentially reduce nat-gas demand from electricity providers to power air-conditioning.  The Commodity Weather Group on Tuesday said forecasts shifted cooler with below-average temperatures expected in the mid-Atlantic region for June 23-27.

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.

US (lower-48) dry gas production on Tuesday was 111.5 bcf/day (+3.0% y/y), according to BNEF. Lower-48 state gas demand on Tuesday was 72.8 bcf/day (+10.1% y/y), according to BNEF.  Estimated LNG net flows to US LNG export terminals on Tuesday were 19.1 bcf/day (-1.4% w/w), according to BNEF.

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, a 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.  Also, the closure of the Strait of Hormuz due to the war in Iran has sharply curtailed nat-gas supplies to Europe and Asia.

As a positive factor for gas prices, the Edison Electric Institute on June 10 reported that US (lower-48) electricity output in the week ended June 6 rose +2.13% y/y to 83,866 GWh (gigawatt hours), and US electricity output in the 52 weeks ending June 6 rose +2.25% y/y to 4,341,775 GWh.

Last Thursday’s weekly EIA report was bullish for nat-gas prices, as nat-gas inventories for the week ended June 12 rose by +73 bcf, below expectations of +80 bcf but right on the 5-year weekly average.  As of June 12, nat-gas inventories were down -1.5% y/y, and +5.8% above their 5-year seasonal average, signaling adequate nat-gas supplies.  As of June 21, gas storage in Europe was 47% full, compared to the 5-year seasonal average of 61% full for this time of year.

Baker Hughes reported last Thursday that the number of active US nat-gas drilling rigs in the week ending June 19 rose by +1 to 122 rigs, well below the 2.5-year high of 134 rigs set in February 2026.