Natural gas prices dropped by 2.31% to 164.9 as a result of increased output and lower-than-anticipated demand next week. This drop happened despite bullish forecasts of record-breaking heat that might drive petrol use by power generators to an all-time high and a smaller-than-expected weekly storage build. Gas output in the Lower 48 states increased to an average of 103.8 billion cubic feet per day (bcfd) in August from 103.4 bcfd in July, according to financial firm LSEG.
This is very close to the record high of 105.5 bcfd in December 2023. The fact that power consumption did not hit the all-time high that some analysts had expected for Thursday was partly due to meteorologists’ small reduction of their temperature estimates for the Lower 48 states.
Furthermore, within the next seven days, there is a 90% possibility that a tropical disturbance over Cuba would intensify into a storm that might affect Florida’s Panhandle or Gulf Coast, according to the U.S. National Hurricane Centre. The US utilities increased their gas storage by 18 billion cubic feet, bringing the total for the week ending July 26, 2024, to 3,249 billion cubic feet.
This was slower than the previous week’s gain of 22 billion cubic feet and much below the 31 billion cubic feet build that the market had anticipated. Despite this, storage levels have risen 8.4% from the same time last year and more than 15% from the five-year average.
