Meteorologists forecast milder weather than previously expected nationwide in the coming weeks, as Cooling Degree Days fell to 187 on Tuesday from 246 on Monday. CDDs measure energy demand to cool buildings.
"The weather forecast cooled off just when the bulls needed them most. So it looks like we're going to see some moderating temperatures according to some forecasters, and that is putting the market under pressure," said Phil Flynn, senior analyst for Price Futures Group.
Financial firm LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 112.1 bcfd this week to 114.2 bcfd next week. Those forecasts were lower than LSEG's outlook on Monday.
Record output and mild spring weather so far this year have allowed energy firms to keep the amount of gas in inventory higher than the five-year (2021-2025) average since March.
Analysts projected the amount of gas in storage would rise to 6.6% above normal during the week ended July 31, up from 6.4% above normal during the previous week.
Gas inventories have remained in surplus despite weeks of above-normal temperatures so far this summer.
"The market is moving into the later stage of the cooling cycle that will be forcing the gas market to look ahead to the low-demand shoulder period where the market will become increasingly reliant upon supply disruptions within the Gulf of Mexico with the approach of the active peak hurricane season," consultancy Ritterbusch & Associates said in a note.
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