September Nymex natural gas (NGU25) on Monday closed down -0.036 (-1.20%).

Sep nat-gas prices on Monday tumbled to a 3.5-month low.  Forecasts for cooler US temperatures, which will reduce natural-gas demand from electricity providers to power air conditioning, are undercutting natural-gas prices.  Forecaster Vaisala said Monday that forecasts shifted cooler over the eastern US for August 16-20.

Ramped-up US nat-gas output is another bearish factor for prices, with current US gas production near a record high and US active nat-gas drilling rigs at a 2-year high.

Lower-48 state dry gas production on Monday was 109.4 bcf/day (+6.3% y/y), according to BNEF.  Lower-48 state gas demand on Monday was 78.9 bcf/day (+8.3% y/y), according to BNEF.  Estimated LNG net flows to US LNG export terminals on Monday were 16.5 bcf/day (+7.1% w/w), according to BNEF.

An increase in US electricity output is positive for nat-gas demand from utility providers.  The Edison Electric Institute reported last Wednesday that total US (lower-48) electricity output in the week ended August 2 rose +0.9% y/y to 99,367 GWh (gigawatt hours), and US electricity output in the 52-week period ending August 2 rose +2.7% y/y to 4,259,351 GWh.

Last Thursday's weekly EIA report was bullish for nat-gas prices since nat-gas inventories for the week ended August 1 rose +7 bcf, below the consensus of +12 bcf and the 5-year average of +29 bcf for the week.  As of August 1, nat-gas inventories were down -4.3% y/y, but were +5.9% above their 5-year seasonal average, signaling adequate nat-gas supplies.  As of August 9, gas storage in Europe was 72% full, compared to the 5-year seasonal average of 79% full for this time of year.

Baker Hughes reported last Friday that the number of active US nat-gas drilling rigs in the week ending August 8 fell by -1 to 123 rigs, slipping from the 2-year high of 124 rigs posted on August 1.  In the past ten months, the number of gas rigs has risen from the 4-year low of 94 rigs reported in September 2024.