Rig counts support this trend: the active U.S. gas rig total remains near a two-year high, with Baker Hughes reporting 122 rigs last week. While that’s slightly below the recent peak of 124, it marks a steady increase from the 4-year low of 94 rigs recorded in late 2024.
Will Mixed Weather and Tepid Demand Limit Short-Covering Rallies?
A shift in short-term weather patterns also weighed on prices. Atmospheric G2 noted forecasts turned warmer in the West but cooler in the East for August 20–24, dampening the earlier bullish outlook based on widespread heat. Power demand showed signs of softening, with U.S. electricity output for the week ended August 9 falling 1.9% year-over-year, according to Edison Electric Institute data.
Lower-48 state gas demand stood at 80.3 bcf/day last Friday, up just 1.2% from a year ago, while LNG exports offered modest support at 15.7 bcf/day, up 4.8% week-over-week.
How Are Inventories Shaping Trader Sentiment?
Storage remains a headwind for bulls. Last week’s EIA report showed a +56 bcf build, slightly above expectations and well above the five-year average of +33 bcf. Inventories are now 6.6% above the five-year seasonal norm, even though they remain 2.4% below year-ago levels.
European gas storage, a key benchmark for global supply comfort, was 72% full as of August 9, compared to a 5-year average of 79%, suggesting broader supply security remains intact despite geopolitical concerns.
Market Forecast: Bearish Bias Holds Below $3.236