August Nymex natural gas (NGQ25) closed up 0.017, or 0.55%, on Thursday after a weekly US inventory report came in below analyst expectations, Nasdaq reported. The Energy Information Administration said natural gas inventories for the week ended July 18 rose 23 bcf, short of the 27 bcf consensus and the five-year average increase of 30 bcf for that time of year.
Even so, the rally was held in check by forecasts for milder weather and by signs of rising supply. As of July 18, inventories stood 4.8% below year-earlier levels but 5.9% above their five-year seasonal average, a level Nasdaq described as signaling adequate supply. European gas storage was 66% full as of July 22 against a five-year seasonal average of 74% at that point in the year.
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Key facts
- August Nymex natural gas closed up 0.017, or 0.55%, on Thursday.
- The EIA reported a 23 bcf storage build for the week ended July 18, versus a 27 bcf consensus and a 30 bcf five-year average.
- Inventories were 4.8% below last year but 5.9% above the five-year seasonal average.
- Active US natural gas rigs rose by 9 to a 17-month high of 117 in the week ending July 18, per Baker Hughes.
- Forecaster Vaisala expected eastern US heat to dissipate and western temperatures to return to near-normal for August 3-7.
Supply and demand data
Production is running above year-ago levels, according to BloombergNEF data cited by Nasdaq. Lower-48 dry gas output on Thursday was 107.1 bcf per day, up 2.9% year over year, while lower-48 demand was 82.4 bcf per day, up 0.1%. Estimated net flows to US LNG export terminals were 15.0 bcf per day, down 4.6% week over week.
On the demand side, the Edison Electric Institute reported Wednesday that total lower-48 electricity output in the week ended July 19 rose 2.1% year over year to 99,373 GWh. Over the 52 weeks ending July 19, output rose 2.4% year over year to 4,251,059 GWh. Higher power generation supports gas demand from utilities.
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Drilling activity has been climbing. Baker Hughes reported that the number of active US gas rigs in the week ending July 18 rose by 9 to 117, a 17-month high. That compares with a four-year low of 94 rigs recorded in September 2024, meaning the count has risen steadily over roughly ten months.
Why it matters
For utilities, power producers, and industrial gas users, the storage report is a weekly read on how quickly the market is rebuilding cushion ahead of winter. A build below both the consensus and the seasonal norm tightens the surplus picture, which is why futures firmed despite soft demand signals. The competing forces, looser supply from more drilling and heavier output versus seasonal cooling demand, are the same dynamics that have kept gas prices rangebound in recent months. Europe’s below-average storage level adds a source of export pull for US LNG in the months ahead.
What to watch
The next directional signals are the EIA’s weekly storage report for the week ended July 25 and Baker Hughes’ weekly rig count, along with whether the temperature shift Vaisala forecast for August 3-7 materializes as projected. Weekly LNG feedgas flows will also indicate whether export demand holds near recent levels.
This article is for informational purposes only and is not financial advice; commodity markets are volatile and prices can move sharply in either direction.
Source: Nasdaq
