January Nymex natural gas (NGF25) on Monday closed up by +0.106 (+3.45%)
Jan nat-gas prices on Monday rallied to a 1-week high and closed moderately higher. Nat-gas prices rose Monday as weather forecasts showed below-normal temperatures at the end of this week for the eastern half of the US, which will boost heating demand for nat-gas.
Warmer winter temperatures could keep US nat-gas supplies elevated, a bearish price factor. US nat-gas inventories as of November 29 are +7.8% above their 5-year seasonal average for this time of year, signaling ample nat-gas supplies.
Lower-48 state dry gas production Monday was 105 bcf/day (-0.9% y/y), according to BNEF. Lower-48 state gas demand Monday was 89.6 bcf/day (+10.9% y/y), according to BNEF. LNG net flows to US LNG export terminals Monday were 13.6 bcf/day (-2.7% 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 last Wednesday that total US (lower-48) electricity output in the week ended November 30 fell -3.94% y/y to 74,881 GWh (gigawatt hours), although US electricity output in the 52-week period ending November 30 rose +1.76% y/y to 4,165,120 GWh.
Last Thursday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended November 29 fell -30 bcf versus expectations of -36 bcf and less than the 5-year average draw for this time of year of -47 bcf. As of November 22, nat-gas inventories were up +5.9% y/y and were +7.8% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 84% full as of December 3, below the 5-year seasonal average of 86% 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 December 6 rose +2 rigs to 102 rigs, modestly above the 3-1/2 year low from September 6 of 94 rigs. Active rigs have fallen since posting a 5-1/4 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).
