October Nymex natural gas (NGV25) on Friday closed up +0.007 (+0.24%).
Oct nat-gas prices recovered from a 1.5-week low on Friday and posted modest gains as forecasts for late-summer US temperatures sparked short covering in nat-gas futures. Forecaster Atmospheric G2 said Friday that forecasts shifted warmer in the South and mid-continent for September 17-21, which will boost nat-gas demand from electricity providers to power the increased air conditioning usage.
Nat-gas prices on Friday initially fell on negative carryover from Thursday when the EIA reported a higher-than-expected build in weekly nat-gas stockpiles. Seasonal maintenance on Gulf Coast pipelines has reduced recent US natural gas exports and allowed gas storage levels to build, a bearish factor for prices.
Higher US nat-gas production has recently been a bearish factor for prices. On Tuesday, the EIA raised its forecast for 2025 US nat-gas production by +0.2% to 106.63 bcf/day from August's estimate of 106.40 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 Friday was 108.0 bcf/day (+7.1% y/y), according to BNEF. Lower-48 state gas demand on Friday was 70.3 bcf/day (-3.2% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 14.5 bcf/day (-4.7% w/w), according to BNEF.
As a supportive factor for gas prices, the Edison Electric Institute reported Wednesday that US (lower-48) electricity output in the week ended September 6 rose +1.03% y/y to 83,003 GWh (gigawatt hours), and US electricity output in the 52-week period ending September 6 rose +2.97% y/y to 4,264,559 GWh.
Thursday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended September 5 rose +71 bcf, above the market consensus of +68 bcf and above the 5-year weekly average of +56 bcf. As of September 5, nat-gas inventories were down -1.3% y/y, but were +6.0% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of September 9, gas storage in Europe was 80% full, compared to the 5-year seasonal average of 86% full for this time of year.
Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ending September 12 was unchanged at 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.
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.
