US Natural Gas Prices Weaken Amid Abundant Supplies and Warmer Forecasts

Natural gas prices declined on Friday amid signs of abundant US supplies. As of July 24, the Energy Information Administration (EIA) reported natural gas inventories were +6.4% above their 5-year seasonal average.

The Commodity Weather Group forecasts warmer temperatures in the western half of the US through August 14, potentially boosting demand from electricity providers to power increased air conditioning use.

However, a bearish factor for natural gas prices is speculation that an El Niño weather system will bring warmer-than-normal temperatures to the Northern Hemisphere this fall and winter, reducing heating demand.