NYMEX Henry Hub natural gas prices for the August 2024 contract have fallen precipitously since production bottomed out at around 99 Bcf/d on June 11th, 2024. The August 2024 contract has fallen about 85 cents per MMBtu as production has gone from around 99 Bcf/d to a high near 102 Bcf/d before Hurricane Beryl caused power outage related production drops of around 1 Bcf/d.
Additionally, the current 6–10-day weather forecast maps have become significantly less bullish since June 11th which will cause power demand to not be as bullish in July as it was back in June, even though power demand is seasonally higher in July.
The maps for July are significantly less red in color than they were on June 11th. The redder the maps are, the more above normal temperatures are, which causes power demand to be much more above the seasonal norm.
Summary
Overall, the same theme as always applies to US natural gas prices as they are affected by the forces of supply from production and demand from summer power related loads due to the weather. Production is expected to rise again in August 2024 and then drop off in September 2024 due to pipeline maintenance expectations, especially in the Northeast. Dominion South fixed prices for September 2024 and October 2024 are back down to shut-in pricing levels around $1.25 / MMBtu as the Cove Point LNG liquefaction terminal goes down for maintenance every year for 3 weeks from September until October.
