As a result of increasing output that outweighed expectations for higher demand over the next two weeks due to projected record heat in the Lower 48 U.S. states, natural gas prices ended up down -0.46% at 172.9. Prices have been pressured by a large excess of petrol in storage, even with the expected increase in demand.
Gas stockpiles are still approximately 16% over average for this time of year, even though injections have been lower than average in 10 of the last 11 weeks. The Lower 48 states’ average gas output was 102.4 billion cubic feet per day (bcfd) in July, according to LSEG. This is an increase from 100.2 bcfd in June and a 17-month low of 99.4 bcfd in May.
In December 2023, the United States’ output hit a record high of 105.5 bcfd. Forecasters predicted that the Lower 48’s weather would remain largely normal through July 28 before becoming hotter than usual until at least August 10, indicating a rise in the need for air conditioning.
The week ending July 19, 2024, saw U.S. utilities add 22 billion cubic feet of gas to storage, above the 15 billion cubic feet rise that the market had anticipated. As a result, stockpiles now stand at 3,231 billion cubic feet (Bcf), up 249 Bcf from the previous year and 456 Bcf over the 2,775 Bcf five-year average. The market is still oversupplied since the overall amount of working gas is more than it has been in the previous five years.
