November Nymex natural gas (NGX25) on Tuesday closed up by +0.141 (+4.20%).
Nov nat-gas prices settled sharply higher on Tuesday as US weather forecasts cooled for mid-October, which could boost heating demand for nat-gas. Forecaster Atmospheric G2 said Tuesday that forecasts shifted cooler in the East and West Coast for October 12-16, and cooler for the Northeast and West Coast for October 17-21.
Higher US nat-gas production is a bearish factor for prices. On Tuesday, the EIA raised its forecast for 2025 US nat-gas production by +0.5% to 107.14 bcf/day from September's estimate of 106.60 bcf/day. US nat-gas production is currently near a record high, with active US nat-gas rigs recently posting a 2-year high.
US (lower-48) dry gas production on Tuesday was 105.9 bcf/day (+3.7% y/y), according to BNEF. Lower-48 state gas demand on Tuesday was 69.0 bcf/day (-5.8% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Tuesday were 15.0 bcf/day (-4.4% w/w), according to BNEF.
As a supportive factor for gas prices, the Edison Electric Institute reported last Wednesday that US (lower-48) electricity output in the week ended September 27 rose +5.96% y/y to 84,530 GWh (gigawatt hours), and US electricity output in the 52-week period ending September 27 rose +2.9% y/y to 4,271,916 GWh.
Last Thursday's weekly EIA report was bullish for nat-gas prices since nat-gas inventories for the week ended September 26 rose +53 bcf, below the market consensus of +64 bcf and below the 5-year weekly average of +85 bcf. As of September 26, nat-gas inventories were up +0.4% y/y, and were +5.0% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of October 5, gas storage in Europe was 83% full, compared to the 5-year seasonal average of 90% 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 3 rose by +1 to 118 rigs, slightly below the 2-year high of 124 rigs posted on August 1. In the past year, the number of gas rigs has risen from the 4.5-year low of 94 rigs reported in September 2024.
