November Nymex natural gas (NGX24) on Thursday closed up +0.180 (+7.69%).
Nov nat-gas prices Thursday rallied sharply to a 1-week high on the outlook for colder US temperatures, which will boost heating demand for nat-gas. Forecaster Maxar Technologies said the 11-15 day forecast is leaning colder for the western half of the US. Nat-gas prices also garnered carryover support from Thursday's rally in European gas prices to a 2-1/2 month high.
Nat-gas rallied Thursday despite a bearish weekly EIA report that showed nat-gas inventories rose +80 bcf last week, well above the consensus for a +68 bcf rise and above the 5-year seasonal average increase for the week of +76 bcf.
Lower-48 state dry gas production Thursday was 100.9 bcf/day (-2.0% y/y), according to BNEF. Lower-48 state gas demand Thursday was 74.1 bcf/day (+7.4% y/y), according to BNEF. LNG net flows to US LNG export terminals Thursday were 12.0 bcf/day (-13.9% 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 Wednesday that total US (lower-48) electricity output in the week ended October 19 rose +2.59% y/y to 70,893 GWh (gigawatt hours), and US electricity output in the 52-week period ending October 19 rose +1.68% y/y to 4,160,757 GWh.
Thursday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended October 18 rose +80 bcf, above expectations of +68 bf and above the 5-year average build for this time of year of +76 bcf. As of October 18, nat-gas inventories were up +2.3% y/y and were +4.6% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 95% full as of October 22, above 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 18 fell by -2 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.
