The forecasts of cooler weather over the next two weeks are not without consequences for the gas market. U.S. natural gas futures fell by about 3% on Thursday, to their lowest level in two weeks. This trend is expected to reduce the amount of gas that power generators burn to run air conditioners

The price drop came ahead of the release of a federal report that should show that construction last week was below normal for the 13th time in the past 14 weeks, including the rare summer pullback during the week ended August 9. This pullback was the first drop in the past 14 weeks. weekly in August since 2006.

Analysts predict that American utilities added 29 billion cubic feet (bcf) of gas to their inventories during the week ended August 16. This compares to an increase of 23 bcf in the same week last year and an average increase over five years (2019-2023) of 41 bcf for this period of the year.

Gas futures for September delivery on the New York Mercantile Exchange fell by 6.7 cents, or 3.1%, to $2.110 per million British thermal units (MMBtu) at 9:03 EDT (13:03 GMT) at 9:03 EDT (13:03 GMT), putting the contract on track for its lowest close since August 6.

Producers increase and decrease production in response to prices, but it generally takes a few months for changes in drilling activity to appear in production data.

In response to this fall in prices, producers reduced average monthly output from 106.0 billion cubic feet per day (bcfd) in February to 102.7 bcfd in March, 102.7 bcfd in March, 101.5 bcfd in April, and a 17-month low of 101.3 bcfd in May, according to federal energy data.

While Henry Hub's monthly spot prices increased to $1.60 per MMBtu in April, $2.12 in May, and $2.54 in June, some producers, including EQT and Chesapeake Energy, began increasing drilling activities, increasing production to 101.0 bcfd in June and 103.4 bcfd in June and 103.4 bcfd in July.

LSEG forecasts that average gas demand in the 48 contiguous states, including exports, will increase from 103.7 billion cubic feet per day this week to 103.9 billion cubic feet per day this week to 103.9 billion cubic feet per day next week. This forecast is lower than LSEG's forecast on Wednesday.

Gas flows to the seven major U.S. LNG export plants have reached 12.9 billion cubic feet per day so far in August, up from 11.9 billion cubic feet per day in July.