US Natural Gas Hits 2-Week High

US natural gas futures rose to $2.92 per MMBtu, the highest in two weeks, supported by expectations of more demand over the next two weeks. Forecasts showed that weather conditions would remain mostly warmer than normal through August 7, potentially boosting gas demand from power generators for air conditioning. However, gains were capped by an EIA report showing that US energy firms added 32 bcf of gas to storage for the week ended July 17, exceeding the five-year average increase of 30 bcf. Inventories remained 6.4% above their five-year seasonal average, signaling adequate supply. On top of that, average gas output in the Lower 48 states rose to 110.4 bcfd so far in July from 110.0 bcfd in June. In addition, flows to major LNG export terminals fell to 17.2 bcfd in July so far from 17.4 bcfd in June, partly due to scheduled maintenance at Freeport LNG’s export facility in Texas. Tropical Storm Bertha also poses a potential threat to LNG export facilities along the Gulf Coast.

US natural gas futures rose above $2.9 per MMBtu, extending the rebound from a two-month low, supported by expectations of stronger demand in the coming weeks. Forecasts showed that weather conditions would remain mostly warmer than normal through August 5, potentially boosting gas demand from power generators for air conditioning. Limiting gains, however, gas inventories were 6.4% above their five-year seasonal average as of July 17, signaling comfortable supply conditions. On top of that, average gas output in the Lower 48 states rose to 110.4 bcfd so far in July from 110.0 bcfd in June. In addition, flows to major LNG export terminals fell to 17.3 bcfd in July so far from 17.4 bcfd in June, partly due to scheduled maintenance at Freeport LNG’s export facility in Texas, reducing the amount of gas being processed for exports and leaving more supply available in the domestic market. Tropical Storm Bertha also poses a potential threat to LNG export facilities along the Gulf Coast.

US natural gas futures fell to $2.85 per MMBtu, a two-month low, contrasting with higher prices in other benchmarks as ample domestic supply shielded the US from the export pressures from the Middle East. 41 billion cubic feet of gas were added to domestic storages in the week to July 10th to extend recent builds that were sharply higher than expected. The result was consistent with outages in Freeport LNG's export facility in Texas prevented gas flows from being ready for export, increasing the available supply of gas for domestic use. On top of that, average gas production in the Lower 48 states increased to 110.5 bcf per day so far in July from 110.0 in the prior month. Meanwhile, solar and wind power generation stateside rose to their near record highs in July, taking market share from gas-powered power plants. The ample supply contrasted with limited LNG flows for major European and Asian consumers as the Iran and US resumed blockading tankers from leaving the Persian Gulf.