September Nymex natural gas (NGU25) on Friday closed down -0.077 (-2.51%).

Sep nat-gas prices settled lower Friday due to expectations for cooler summer weather that would reduce demand from electricity providers to run air conditioning.  Forecaster Vaisala said Friday that forecasts shifted cooler along the West and East coasts for August 13-17.

Nat-gas prices also fell on near-record US gas production as US active nat-gas drilling rigs rose to a 2-year high on August 1.

Lower-48 state dry gas production on Friday was 109.2 bcf/day (+6.3% y/y), according to BNEF.  Lower-48 state gas demand on Friday was 79.1 bcf/day (+0.2% y/y), according to BNEF.  Estimated LNG net flows to US LNG export terminals on Friday were 15.5 bcf/day (-0.8% 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 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.

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 5, gas storage in Europe was 70% full, compared to the 5-year seasonal average of 78% full for this time of year.

Baker Hughes reported 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.