Forecasts for Late-Summer Warmth Boost Nat-Gas Prices

Core Insights - Natural gas prices experienced a modest recovery after hitting a 1.5-week low, driven by warmer temperature forecasts in the US, which are expected to increase demand for natural gas from electricity providers [1] - The US Energy Information Administration (EIA) reported a higher-than-expected build in natural gas stockpiles, contributing to initial price declines [2] - Increased US natural gas production has been a bearish factor for prices, with the EIA raising its 2025 production forecast by 0.2% [3] Production and Demand - US dry gas production reached 108.0 billion cubic feet per day (bcf/day), marking a 7.1% year-over-year increase, while demand decreased to 70.3 bcf/day, down 3.2% year-over-year [4] - Estimated liquefied natural gas (LNG) net flows to US export terminals were 14.5 bcf/day, reflecting a weekly decline of 4.7% [4] Electricity Output - The Edison Electric Institute reported a year-over-year increase in US electricity output, with a rise of 1.03% to 83,003 GWh for the week ending September 6, and a 2.97% increase over the past 52 weeks [5] Inventory Levels - The EIA's weekly report indicated a build of 71 billion cubic feet (bcf) in natural gas inventories, surpassing market expectations and the 5-year average, although inventories were down 1.3% year-over-year [6] - As of September 9, European gas storage was 80% full, compared to a 5-year seasonal average of 86% [6]