November Nymex natural gas (NGX25) on Friday closed down by -0.163 (-4.99%).
Nov nat-gas prices dropped to a 2.5-week low on Friday and settled sharply lower on ample storage and warmer US weather forecasts, which should curb heating demand for nat-gas. As of October 3, US nat-gas supplies in storage are +4.5% above their 5-year seasonal average, signaling adequate supplies. Warmer-than-normal US temperatures are also weighing on nat-gas prices as forecaster Atmospheric G2 said on Friday that the outlook turned warmer for the eastern half of the country for October 20-24.
Higher US nat-gas production is a …
November Nymex natural gas (NGX25) on Friday closed down by -0.163 (-4.99%).
Nov nat-gas prices dropped to a 2.5-week low on Friday and settled sharply lower on ample storage and warmer US weather forecasts, which should curb heating demand for nat-gas. As of October 3, US nat-gas supplies in storage are +4.5% above their 5-year seasonal average, signaling adequate supplies. Warmer-than-normal US temperatures are also weighing on nat-gas prices as forecaster Atmospheric G2 said on Friday that the outlook turned warmer for the eastern half of the country for October 20-24.
Higher US nat-gas production is a bearish factor for prices. On Tuesday, 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.
US (lower-48) dry gas production on Friday was 108.1 bcf/day (+5.0% y/y), according to BNEF. Lower-48 state gas demand on Friday was 66.0 bcf/day (-6.7% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 16.0 bcf/day (+1.6% 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 4 rose +2.91% y/y to 80,972 GWh (gigawatt hours), and US electricity output in the 52-week period ending October 4 rose +2.89% y/y to 4,274,208 GWh.
Thursday’s weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended October 3 rose +80 bcf, above the market consensus of +77 bcf but below the 5-year weekly average of +94 bcf. As of October 3, nat-gas inventories were up +0.3% y/y, and were +4.5% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of October 8, gas storage in Europe was 83% full, compared to the 5-year seasonal average of 91% 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 10 rose by +2 to 120 rigs, slightly below the 2-year high of 124 rigs posted on August 1. 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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