June Nymex natural gas (NGM25) on Friday closed down by -0.028 (-0.83%).

June nat-gas prices on Friday slid to a fresh 2-week low on the outlook for cooler US spring temperatures that will dampen nat-gas demand from electricity providers to power air conditioning.  On Friday, forecaster Atmospheric G2 said temperatures will be below normal for the eastern and northern parts of the US for May 21-25.  The slack demand for nat-gas allows US supplies to climb, with EIA nat-gas inventories +2.6% above their 5-year seasonal average as of May 9.

Lower-48 state dry gas production Friday was 105.5  bcf/day (+4.7% y/y), according to BNEF.  Lower-48 state gas demand Friday was 67.3 bcf/day (-1.6% y/y), according to BNEF.  LNG net flows to US LNG export terminals Friday were 14.7 bcf/day (-1.1% w/w), according to BNEF.

A decline in US electricity output is negative for nat-gas demand from utility providers.  The Edison Electric Institute reported Wednesday that total US (lower-48) electricity output in the week ended May 10 fell -2.8% y/y to 72,735 GWh (gigawatt hours), although US electricity output in the 52-week period ending May 10 rose +3.6% y/y to 4,251,600 GWh.

Thursday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended May 9 rose +110 bcf, right on expectations but well above the 5-year average build for this time of year of +83 bcf.  As of May 9, nat-gas inventories were down -14.6% y/y and +2.6% above their 5-year seasonal average, signaling adequate nat-gas supplies.  In Europe, gas storage was 44% full as of May 14, versus the 5-year seasonal average of 54% full for this time of year.

Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ending May 16 fell -1 to 100 rigs, modestly above the 4-year low of 94 rigs posted on September 6, 2024.  Active rigs have fallen since posting a 5-1/2 year high of 166 rigs in Sep 2022, up from the pandemic-era record low of 68 rigs posted in July 2020 (data since 1987).