Gas prices are falling by almost 4% today and are now very close to the USD 3/MMBTU level, despite the ongoing cooling season, during which prices usually trend upward. Gas is on a downward trajectory primarily due to high production, which is more than offsetting the significant increase in inventories, even with higher gas consumption due to the weather. It was previously expected that increased LNG exports would cause problems with replenishing stocks, but exports themselves have not risen to levels of 20 or even more billion cubic feet per day.
Current weather forecasts for the coming days indicate lower than normal temperatures, but at the end of the first week of August, we are again expected to see a heat wave in the US. It is worth noting that the current situation is very similar to last year: the price has been falling since June and could potentially reach a local low in early August. This could happen if demand and LNG exports actually increase. However, if stocks continue to grow significantly above the 5-year average, there could be a permanent break below the $3/MMBTU level.
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Prices are currently significantly higher than last year. The pattern of decline in the period from June to early August is repeating itself. Nevertheless, a rebound from current levels will obviously depend on the demand situation. It is worth noting that last year, between August 5 and 15, the price rose by 20%, but larger increases did not occur until the beginning of September, when the 14, 50, and 100 period averages were broken. A break of the SMA14 would signal the actual start of an upward trend. Source: xStation5
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