Houston — The NYMEX August natural gas futures contract settled Tuesday at $2.788/MMBtu, down 4 cents, as dry gas production in the US remains strong but has retreated from record highs set last week.
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The front-month contract traded Tuesday between $2.784/MMBtu and $2.835/MMBtu.
Despite being 717 Bcf below year-ago storage levels and 493 Bcf below the historical average for total stocks, the market doesn't seem to be reacting.
"The market believes that whatever demand generates, supply will take care of," according to IAF Advisors analyst Kyle Cooper.
Tuesday's US dry gas production is at 79.4 Bcf/d, down from consistently being above 80 Bcf/d the last week, according to S&P Global Platts Analytics data.
Total US demand is averaging 69.5 Bcf/d so far in July, up 4 Bcf/d from year-ago levels, according to Platts Analytics.
LNG feedgas demand accounts for 0.5 Bcf/d of the day-on-day increase in total demand. LNG feedgas is averaging 3.3 Bcf/d so far in July, 1.1 Bcf/d above year-ago levels, according to Platts Analytics.
Demand changes can be mostly accounted for by power burn, which increased 0.4 Bcf/d day on day and has averaged 35.9 Bcf/d this time of year, according to Platts Analytics.
Looking ahead, the most recent six- to 10-day temperature outlook from the National Weather Service calls for above-average temperatures for most of the US and below-average temperatures for the Rockies and Southwest.
Power burn totals in the Southwest are 4.4 Bcf/d for Tuesday, a 244-MMcf/d day-on-day decrease. The Rockies has averaged power burn totals of 612 MMcf/d so far in July, a 7% decrease from this time a year ago, according to Platts Analytics.
The NYMEX settlement price is considered preliminary and subject to change until a final settlement price is posted at 7 pm EDT (2300 GMT).
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