September Nymex natural gas (NGU25) on Monday closed down -0.002 (-0.07%).

Sep nat-gas prices have been under pressure over the past 2.5 months and dropped to a 9.5-month nearest-futures low Monday as forecasts for cooler late-summer weather weigh on prices. Forecaster Vaisala on Monday said lower-than-normal temperatures will blanket the US from North Carolina to Northern California for September 4-8, which will reduce demand for nat-gas to power air conditioning.

Ramped-up US nat-gas production is another bearish factor for prices. On August 12, the EIA raised its forecast for 2025 US nat-gas production by +0.5% to 106.44 bcf/day from July's estimate of 105.9 bcf/day. The EIA raised its forecast for 2026 US nat-gas production by +0.7% to 106.09 from July's 105.4 bcf/day forecast. US nat-gas production is currently near a record high, with active US nat-gas rigs recently posting a 2-year high.

US (lower-48) dry gas production on Monday was 109.0 bcf/day (+6.3% y/y), according to BNEF. Lower-48 state gas demand on Monday was 76.6 bcf/day (+1.5% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Monday were 15.7 bcf/day (+13.5% w/w), according to BNEF.

As a supportive factor for gas prices, the Edison Electric Institute reported last Wednesday that US (lower-48) electricity output in the week ended August 16 rose +7.1% y/y to 99,160 GWh (gigawatt hours), and US electricity output in the 52-week period ending August 16 rose +2.7% y/y to 4,264,139 GWh.

Last Thursday's weekly EIA report was bullish for nat-gas prices since nat-gas inventories for the week ended August 15 rose +13 bcf, below the consensus of +18 bcf and well below the 5-year weekly average of +35 bcf. As of August 15, nat-gas inventories were down -3.0% y/y, but were +5.8% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of August 19, gas storage in Europe was 74% full, compared to the 5-year seasonal average of 82% full for this time of year.

Baker Hughes reported last Friday that the number of active US nat-gas drilling rigs in the week ending August 22 was unchanged at 122 rigs, just below the 2-year high of 124 rigs posted on August 1. In the past year, the number of gas rigs has risen from the 4-year low of 94 rigs reported in September 2024.