Abundant US Natural Gas Inventories Weigh on Prices
Natural gas prices closed lower amid signs of ample supplies in the United States. As of July 24, EIA data showed inventories were 6.4% above their five-year seasonal average, contributing to downward pressure on prices. Despite this, losses remained limited due to forecasts for warmer weather expected through August, which could increase demand from electricity providers. Medium-term concerns include the potential impact of an El Niño system that may bring warmer temperatures and reduce heating demand in the fall and winter. US dry gas production reached 112.7 bcf/day as of July 31, up 3.4% year-over-year, according to BNEF data. While higher production is bearish for prices, recent electricity output growth may provide some support.