Natural Gas Prices Rise Ahead of August Contract Expiration
On July 29, natural gas prices rebounded ahead of the expiration of the August Nymex futures contract. The nearest-futures price closed up by +0.063 (+2.37%) after hitting a three-month low earlier in the week due to fund short covering and shifting weather forecasts that reduced demand for cooling. Cooler-than-expected temperatures across much of the U.S., along with expectations of higher-than-average gas storage builds, weighed on prices. The market is also concerned about an anticipated El Niño system potentially reducing heating demand during fall and winter months. Despite these bearish factors, electricity generation in the lower 48 states rose by +2% year-over-year for the week ending July 18, offering some support to gas prices. Natural gas production remains elevated at 112.1 bcf/day (+3.9% y/y), while demand has declined (-7.2% y/y).
Topics: energy futures markets weather impact