Friday brings the latest rig count data from Baker Hughes. Last week, the number of rigs drilling for natural gas in the United States rose by four to 900 — the highest level since February. Already-flush U.S. production may grow even faster if the rig count continues to trend higher.
Weather forecasts remain bullish, with warmer-than-normal temperatures forecast for much of the nation. But bullish weather all throughout this summer — July was perhaps the hottest since 1955 — has done little to support natural gas; surging production has more than offset the increase in demand from the weather.
On top of that, recent macroeconomic troubles — which could negatively impact industrial demand — are an added burden on natural gas prices. Demand from industrial end-users makes up about 30 percent of total consumption. As the year-over-year inventory deficit declines and storage approaches last year’s record levels, it is likely that prices will fall further from here as summer winds down.
NOAA’s 6-10 Day Weather Outlook:
NOAA’s 8-14 Day Weather Outlook: