October Nymex natural gas (NGV26) on Monday closed down -0.076 (-2.61%).
Nat-gas prices tumbled to a 1-week low on Monday and settled lower on negative carryover from a -7% plunge in European nat-gas prices to a 2-week low.
Losses in nat-gas prices were contained on Monday by forecasts for hotter US weather, which could boost nat-gas demand from electricity providers for air conditioning. The Commodity Weather Group said Monday that forecasts shifted to hotter, with above-average temperatures expected across the US Gulf Coast through September 30.
A bearish medium-term factor for nat-gas prices is the market's expectation that a “Super El Niño” will bring warmer-than-normal temperatures to the Northern Hemisphere this fall and winter, reducing heating demand for nat-gas.
US (lower-48) dry gas production on Monday was 112.8 bcf/day (+4.0% y/y), according to BNEF. Lower-48 state gas demand on Monday was 74.1 bcf/day (+7.9% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Monday were 18.2 bcf/day (-6.8% w/w), according to BNEF.
As a positive factor for gas prices, the Edison Electric Institute reported last Wednesday that US (lower-48) electricity output in the week ended September 12 rose +16.1% y/y to 94,427 GWh (gigawatt hours). Also, US electricity output in the 52 weeks ending September 12 rose +3.3% y/y to 4,405,549 GWh.
As a bearish factor, the US Energy Information Administration (EIA) on August 11 projected that US nat-gas storage levels will swell to 3,985 bcf at the end of October, the highest level in 10 years and 5% above the five-year average. Last Monday, the EIA raised its 2027 US dry natural gas production estimate to 116.0 bcf/day from 115.3 bcf/day projected in July.
Last Thursday's weekly EIA report was bullish for nat-gas prices, as it showed a +44 bcf increase in US nat-gas inventories for the week ended September 11, below expectations of +48 and below the 5-year weekly average of +74 bcf. As of September 11, nat-gas inventories were down -3.9% y/y and +3.7% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of September 19, gas storage in Europe was 70% full, compared to the 5-year seasonal average of 85% full for this time of year.
Baker Hughes reported last Friday that the number of active US nat-gas drilling rigs in the week ended September 18 rose by +2 to match the 3-year high of 134 rigs first set in February 2026.
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.
