U.S. Natural Gas Henry Hub (NATGAS) prices are down over 2% today, hitting the lowest level since May 21. Bearish fundamentals continue to outweigh supportive weather forecasts. The downward momentum in prices is driven by soft spot market rates, elevated gas production in July, and above-average storage levels across the U.S.
Despite forecasts projecting persistently high temperatures along the U.S. coasts through the end of July, gas supply remains ample. Additionally, temperatures across the continental U.S. have slightly cooledâtypically reducing demand for gas-fired power used in air conditioning.
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Source: NOAA, Climate Prediction Center
- Average daily gas production in July has reached 106.8 billion cubic feet per day (bcfd), slightly exceeding Juneâs record of 106.4 bcfd. Adding further pressure, storage data has also weighed on the market.
- In the week ending June 27, U.S. utilities injected 55 billion cubic feet (bcf) into storage, surpassing expectations of 53 bcf and well above the 35 bcf recorded during the same period last year.
- This marked the 11th consecutive week of above-seasonal storage builds, pushing total inventories to nearly 3 trillion cubic feet.
CFTC data also confirms the weakening market sentiment. Large speculators (Non-Commercials) cut their net long positions for the first time in three weeks, bringing bullish bets to the lowest level since mid-June.
NATGAS
Source: xStation5
