Natural Gas Prices Hold Above Two‑Month Low as Weather and Supply Dynamics Shape Market

August Nymex natural gas (NGQ26) settled up +0.007 (+0.24%) as it consolidated above Monday’s two‑month low.

Weather‑Driven Demand Pressure

■The Commodity Weather Group forecast below‑average temperatures across the Southwest through July 23, weighing on gas demand from power generators for air‑conditioning.

■Cooler‑weather expectations are exerting downward pressure on near‑term prices.

Production and Inventory Update

■BNEF reports U.S. (lower‑48) dry gas output at 112.1 bcf/day (+3.7% YoY).

■Lower‑48 gas demand stood at 80.9 bcf/day (+1.9% YoY).

■The EIA lifted its 2026 U.S. dry gas production forecast to 112.2 bcf/day (previously 111.0 bcf/day).

■The weekly EIA storage report showed a +61 bcf build for the week ended July 3, above the five‑year weekly average of +51 bcf.

■As of July 3, inventories were down ‑0.8% YoY but +6.6% above the five‑year seasonal average, indicating ample supply.

Global LNG Supply‑Demand Tilt

■Qatar disclosed that the March 19 attack on Ras Laffan damaged 17% of the plant’s LNG export capacity, a loss that could take three to five years to repair.

■Ras Laffan accounts for roughly 20% of global LNG supply; any sustained curtailment could lift U.S. export prospects.

■Market watchers warn that a strong El Niño event this fall/winter may bring warmer‑than‑normal temperatures to the Northern Hemisphere, trimming heating demand and exerting bearish pressure on gas.

Power Generation and Supporting Factors

■The Edison Electric Institute reported that U.S. (lower‑48) electricity output for the week ended July 4 rose 7.73% YoY to 100,996 GWh.

■For the 52‑week period ending July 4, generation increased 2.33% YoY to 4,345,875 GWh.

■Robust power demand provides a bullish underpinning for natural gas.

Ege Kaan: Natural gas is currently caught between opposing forces. Cool‑weather forecasts and rising production/inventories push prices lower, while the Ras Laffan capacity loss and strong electricity demand lend upward support. In the near term, traders should watch weather model updates closely; over the medium term, any disruption to global LNG supply chains and the evolving El Niño outlook will be the decisive drivers.