August Nymex natural gas (NGQ26) on Wednesday closed up +0.020 (+0.69%).
Natural gas prices rose on Wednesday driven by projections of above-average summer temperatures across much of the U.S. Northeast region. The Commodity Weather Group adjusted its forecast Wednesday to indicate higher-than-normal temperatures persisting through July 19 in northern regions. This warmer outlook increases electricity demand for air conditioning which in turn elevates natural gas consumption.
A bearish pressure on natural gas prices exists in the medium term as markets consider potential impacts from an El Niño weather pattern. This could bring significantly warmer temperatures during North America’s peak heating season reducing energy demand for heating applications.
U.S. dry gas production in the lower-48 states Wednesday averaged 111.2 billion cubic feet per day (+3.2% year-over-year) per BNEF data. Concurrent consumption Wednesday reached 83.1 bcf/day (+4.1% year-over-year) according to the same source. LNG export terminal net outflows Wednesday totaled 17.8 bcf/day reflecting a slight week-over-week decline (-3.3%).
Production projections face headwinds to positive pricing momentum. The Energy Information Administration increased its 2026 U.S. dry natural gas production forecast last Tuesday to 111.2 bcf/day from prior estimates of 111.0 bcf/day.
Global LNG supply constraints offer medium-term support for prices. On March 19th Qatar announced extensive damage to the Ras Laffan LNG processing facility the world’s largest export complex. Infrastructure damage affecting 17% of Ras Laffan’s export capacity from Iranian attacks will require 3–5 years for full repair. Given Ras Laffan represents approximately 20% of global LNG supply these constraints could stimulate increased U.S. export volumes.
U.S. electricity generation strength provides additional demand support. The Edison Electric Institute noted a 7.73% year-over-year increase in lower-48 electrical output for the week ending July 4 totaling 100,996 gigawatt hours. Full-year 2023 generation through July 4 also rose 2.33% year-over-year to 4,345,875 GWh.
Market sentiment anticipates Thursday’s EIA storage report to show increases nearing +44 bcf for the week ending July 10 close to the five-year average of +45 bcf. However last Thursday’s EIA report showed a +61 bcf increase for the week ending July 3 meeting expectations but exceeding the five-year average of +51 bcf. Current storage levels at -0.8% year-over-year and +6.6% above seasonal benchmarks indicate ample supply reserves. European storage levels currently stand at 52% full versus the 68% seasonal average.
Baker Hughes reported no change in operating U.S. natural gas drilling rigs for the week ending July 10 with 126 active rigs – down from the 2.5-year high of 134 rigs recorded in February 2026.
On the date of publication Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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