Natural Gas Prices Decline as Cooler Forecasts Emerge
August Nymex natural gas prices closed down -1.54% on Friday, retreating toward a two-and-a-half-month low due to higher-than-average inventories and slightly cooler weather forecasts. While Commodity Weather Group still predicts above-normal temperatures in the interior West through August 7, it has revised downward from earlier projections. A powerful El Niño system is expected this fall and winter, potentially reducing heating demand for natural gas. US dry gas production reached 111.6 bcf/day on Friday (+2.9% y/y), while lower-48 state gas demand fell to 77.6 bcf/day (-6.5% y/y). LNG net flows increased by +3.7% week-over-week, and the EIA raised its production forecast for 2026. Despite a mixed weekly inventory report—showing an increase of +32 bcf—the overall supply remains above average. Electricity output in the lower-48 states rose slightly year-on-year, but this was not enough to offset bearish pressure from rising gas supplies and production forecasts.
Topics: commodities energy weather impact