November Nymex natural gas (NGX24) on Thursday closed up by +0.015 (+0.56%).
Nov nat-gas prices Thursday recovered from a 2-1/2 week low and settled moderately higher. Short-covering emerged in nat-gas futures late Thursday morning on forecasts for colder US temperatures that will boost nat-gas demand for heating. Forecaster Atmospheric G2 said Thursday that forecasts have shifted notably colder for the western half of the US for October 15-19.
Nat-gas prices on Thursday initially dropped to a 2-1/2 week low after weekly EIA nat-gas inventories rose +82 bcf, a larger build than the expectations of +71 bcf.
Lower-48 state dry gas production Thursday was 101.9 bcf/day (-1.1% y/y), according to BNEF. Lower-48 state gas demand Thursday was 71.4 bcf/day (+4.1% y/y), according to BNEF. LNG net flows to US LNG export terminals Thursday were 12.2 bcf/day (+2.0% 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 electricity output in the week ended October 5 rose +3.58% y/y to 78,680 GWh (gigawatt hours), and US electricity output in the 52-week period ending October 5 28 rose +1.48% y/y to 4,154,306 GWh.
Thursday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended October 4 rose +82 bcf, higher than expectations of +71 but below the 5-year average build for this time of year of +96 bcf. As of October 4, nat-gas inventories were up +2.8% y/y and were +5.1% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 95% full as of October 6, above the 5-year seasonal average of 91% 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 4 rose by +3 rigs to 102 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.
