Fridays Nat Gas Wrap Up Nat-gas prices continue to be undercut by high inventories caused by weak heating demand during the abnormally mild winter. This past winter's warm temperatures caused nat-gas inventories to rise in Europe and the United States. Gas storage across Europe was 87% full as of August 6, well above the 5-year seasonal average of 73% full for this time of year. U.S. nat-gas inventories as of August 4 were +11.2% above their 5-year seasonal average.
A decrease in U.S. electricity output is bearish for nat-gas demand from utility providers. The Edison Electric Institute reported Wednesday that total U.S. electricity output in the week ended August 5 fell -0.8% y/y to 95,336 GWh (gigawatt hours). Also, cumulative U.S. electricity output in the 52-week period ending August 5 fell -1.6% y/y to 4,061,687 GWh.
Thursday's weekly EIA report of +29 bcf for the week ended August 4 was bearish for nat-gas prices since it was above the estimate of +24 bcf. Also, as of August 4, nat-gas inventories were up +21.2% y/y and +11.2% above their 5-year seasonal average.
Baker Hughes reported Friday that the number of active U.S. nat-gas drilling rigs in the week ended August 11 fell by -5 to a 1-1/2 year low of 123 rigs. Active rigs rose to a 4-year high of 166 rigs in September 2022. Active rigs have more than doubled from the record low of 68 rigs posted in July 2020 (data since 1987).