US Natural Gas Prices Fall for 6th Straight Week Amid Higher Storage, Softer Demand
US natural gas prices ended another week in the red following a higher-than-expected gas injection into storage and milder weather forecasts.In the futures market, the Nymex front-month contract closed the week at $2.67 per million British thermal units on Friday, down from $2.79/MMBtu on July 31.Natural gas spot prices, however, increased $0.04/MMBtu to $2.60/MMBtu on Wednesday, according to the US Energy Information Administration's Weekly Gas Storage Supplement, released on Thursday.This comes amid below-average temperatures across most of Central and Eastern US this week, which sapped demand for gas-fired power burn.Total gas demand for the week dropped by 0.2 billion cubic feet per day, or less than 1%, led by a 0.4 Bcf/d decline in LNG feedgas over the prior week, according to LSEG data.Meanwhile, gas output fell by 0.8 Bcf/d, or 1%, with dry gas output dropping 0.6 Bcf/d, while imports from Canada dropped 3% during the week.US LNG feedgas flows averaged around 17.5 Bcf/d during the first week of August, which is below the Summer peak of 19 Bcf/d in April, according to a report by Natural Gas Intelligence.This was largely due to the Freeport LNG facility in Texas entering into scheduled maintenance on July 10, which is set to last until early August.The net injection into storage for the week ended July 31 was 33 Bcf, up from last week's 28 Bcf, bringing total gas inventories to 3,117 Bcf, according to weekly EIA inventory data.Storage injections were above forecasts, which had expected a net build of 30 Bcf, and were significantly above the prior year's net injection of just 13 Bcf into storage, as well as the five-year average for this period, at 23 Bcf, according to data compiled by Investing.com.Only two regions reported a net injection into storage for the week ended July 31, the East and the Midwest, reporting 24 Bcf and 20 Bcf, resulting in a 5% and 7% surplus to their five-year averages, respectively.Meanwhile, the Pacific and Mountain regions reported withdrawals of 3 Bcf and 1 Bcf, respectively, while South Central and Salt regions saw withdrawals of 6 Bcf and 11 Bcf, respectively.At 3,117 Bcf, total US working gas in storage was 12 Bcf, or less than 1% below the same period last year, but 195 Bcf, or 7% above the five-year average for this period.Weather forecasts turned bearish over the week, with the northern and eastern parts of the country expected to see near-normal temperatures, while the northeastern regions are set to see below-normal temperatures from August 14 through August 20, according to the National Weather Service.This marks a sharp shift from the above-normal temperatures that blanketed the whole of the country in recent weeks, with persistent heatwaves sending temperatures north of 40 degrees in Celcius across certain key regions.According to Pinebrook Energy Advisors, temperature forecasts "are largely unsupportive," aside from a brief heatwave set to last "over the next five days."A total of 31 LNG carriers departed US ports during the week, down four from the prior week, with a total combined capacity of 119 Bcf, down 16 Bcf from last week.The US gas rig count decreased by three from 127 the previous week to 124 in the week ending Aug. 7, according to data from Baker Hughes (BKR) released Friday. That compares with 123 gas rigs in operation in the US a year earlier.The consolidated North American oil and gas rig count, a key early indicator of future production levels, decreased by three to 804 from 807 the previous week.In international markets, European TTF gas prices averaged $19.14/MMBtu for the week ended August 05, $1.03/MMBtu below the prior week. Meanwhile, the Japan-Korea Marker averaged $21.23/MMBtu, about $0.37/MMBtu above the prior week.