November Nymex natural gas (NGX24) on Monday closed up by +0.021 (+0.72%).
Nov nat-gas prices Monday rose to a 3-1/2 month high and posted modest gains. Nat-gas prices rose on forecasts for warmer US weather that will boost demand from electricity providers to power increased air conditioning usage. The Commodity Weather Group said Monday that forecasts shifted warmer for the center of the country from October 5-9. However, prices fell back from their best levels after a longer-term forecast called for cooler temperatures to settle across the country.
Lower-48 state dry gas production Monday was 100.5 bcf/day (+0.2% y/y), according to BNEF. Lower-48 state gas demand Monday was 72.1 bcf/day (+9.9% y/y), according to BNEF. LNG net flows to US LNG export terminals Monday were 12.3 bcf/day (+1.7% w/w), according to BNEF.
An increase in US electricity output is positive for nat-gas demand from utility providers. The Edison Electric Institute reported last Wednesday that total US electricity output in the week ended September 21 rose +9.23% y/y to 83,729 GWh (gigawatt hours), and US electricity output in the 52-week period ending September 21 rose +1.66% y/y to 4,149,047 GWh.
Last Thursday's weekly EIA report was bullish for nat-gas prices since nat-gas inventories for the week ended September 20 rose +47 bcf, below expectations of +52 and well below the 5-year average build for this time of year of +88 bcf. As of September 20, nat-gas inventories were up +4.0% y/y and were +7.1% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 94% full as of September 22, above the 5-year seasonal average of 89% 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 September 27 rose by +3 rigs to 99 rigs, modestly above the 3-1/3 year low from September 6 of 94 rigs. Active rigs have fallen since posting a 5-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).
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.
