At 13:15 GMT, Natural Gas Futures are trading $2.877, down $0.077 or -2.61%.
Will Rising LNG Exports Offset Storage Pressures?
Strength in LNG exports is offering some near-term demand support. Estimated LNG feedgas flows reached 16.5 Bcf/d Monday, up 7.1% week-on-week, helping to limit selling pressure. Cooling demand also remains firm as high pressure dominates most of the U.S., keeping highs in the upper 80s to 100s, especially in the Southwest and Texas. However, cooler temperature forecasts for the eastern U.S. from August 16–20 could ease power burn demand from air conditioning, trimming support.
On the bearish side, traders remain focused on storage. The EIA reported a smaller-than-expected +7 Bcf injection for the week ended Aug. 1, but expectations for the week ended Aug. 8 point to a much larger build, well above last year’s 2 Bcf withdrawal and the 33 Bcf five-year average injection. End-of-season storage near 4.0 Tcf remains the consensus, keeping oversupply concerns intact.
Production Near Record Highs Keeps Bears in the Game
Dry gas production remains near record territory, hitting 109.4 Bcf/d on Monday, up 6.3% year-on-year. The Lower 48’s gas rig count slipped by one last week to 123, just off the recent two-year high, but overall drilling activity remains strong. While total U.S. electricity output rose 0.9% year-on-year in early August—supporting gas demand from utilities—the supply side continues to outweigh incremental demand gains.
Can Technical Support Hold Against Market Fundamentals?