December Nymex natural gas (NGZ25) on Friday closed up +0.168 (+4.25%).
Dec nat-gas prices on Friday rallied sharply to a 7-month nearest-futures high on the outlook for colder US temperatures next month, which could potentially boost heating demand for nat-gas. Forecaster Vaisala said Friday that weather forecasts shifted cooler in the Midwest and East for November 10-14.
US (lower-48) dry gas production on Friday was 108.9 bcf/day (+6.6% y/y), according to BNEF. Lower-48 state gas demand on Friday was 79.0 bcf/day (+10.4% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 17.4 bcf/day (+4.7% w/w), according to BNEF.
As a supportive factor for gas prices, the Edison Electric Institute reported Wednesday that US (lower-48) electricity output in the week ended October 25 rose +1.9% y/y to 72,772 GWh (gigawatt hours), and US electricity output in the 52-week period ending October 25 rose +2.9% y/y to 4,282,176 GWh.
Higher US nat-gas production is a bearish factor for prices. On October 7, the EIA raised its forecast for 2025 US nat-gas production by +0.5% to 107.14 bcf/day from September's estimate of 106.60 bcf/day. US nat-gas production is currently near a record high, with active US nat-gas rigs recently posting a 2-year high.
Thursday's weekly EIA report was neutral for nat-gas prices since nat-gas inventories for the week ended October 24 rose +74 bcf, right on the market consensus, but above the 5-year weekly average of +67 bcf. As of October 24, nat-gas inventories were up +0.5% y/y and were +4.6% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of October 29, gas storage in Europe was 83% full, compared to the 5-year seasonal average of 92% full for this time of year.
Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ending October 31 rose by +4 to a 2.25-year high of 125 rigs. In the past year, the number of gas rigs has risen from the 4.5-year low of 94 rigs reported in September 2024.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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