December Nymex natural gas (NGZ25) on Thursday closed up +0.125 (+2.95%).
Dec nat-gas prices moved higher on Thursday due to expectations that colder US temperatures will boost heating demand for nat-gas. Forecaster Atmospheric G2 said Thursday that forecasts shifted colder over the eastern US for November 11-15. Thursday's weekly EIA storage report was neutral for prices as nat-gas inventories rose+33 bcf for the week ended October 31, right on expectations but below the five-year average of +42 bcf.
US (lower-48) dry gas production on Thursday was 110.1 bcf/day (+8.4% y/y), according to BNEF. Lower-48 state gas demand on Thursday was 79.5 bcf/day (+1.5% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Thursday were 17.0 bcf/day (+2.1% 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 November 1 rose +0.05% y/y to 73,730 GWh (gigawatt hours), and US electricity output in the 52-week period ending November 1 rose +2.89% y/y to 4,282,216 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 31 rose +33 bcf, right on the market consensus, but below the 5-year weekly average of +42 bcf. As of October 31, nat-gas inventories were up +0.4% y/y and were +4.3% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of November 4, 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 last 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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