October Nymex natural gas (NGV24) on Monday closed down by -0.105 (-4.62%).
Oct nat-gas prices Monday fell sharply due to forecasts for cooler US weather that will reduce nat-gas demand from electricity providers to run air conditioning. Maxar Technologies said Monday that the 6-10 day forecast has turned cooler for the Midwest and West as a trough in the jet stream has grown deeper than in earlier outlooks, which will keep colder temperatures in place for longer.
Lower-48 state dry gas production Monday was 101 bcf/day (-0.7% y/y), according to BNEF. Lower-48 state gas demand Monday was 70.4 bcf/day (+0.6% y/y), according to BNEF. LNG net flows to US LNG export terminals Monday were 13.4 bcf/day (+2.7% 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 Thursday that total US electricity output in the week ended August 31 rose +6.26% y/y to 92,863 GWh (gigawatt hours), and US electricity output in the 52-week period ending August 31 rose +1.81% y/y to 4,148,821 GWh.
Last Thursday's weekly EIA report was bullish for nat-gas prices since nat-gas inventories for the week ended August 30 rose +13 bcf, below expectations of +27 and well below the 5-year average build for this time of year of +51 bcf. As of August 30, nat-gas inventories were up +6.3% y/y and were +10.7% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 91% full as of August 21, above the 5-year seasonal average of 83% 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 6 fell by -1 rig to a 3-1/3 year low of 94 rigs. Active rigs have fallen back 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.
