October Nymex natural gas (NGV25) on Friday closed down -0.026 (-0.85%).
Oct nat-gas prices on Friday again nearly matched Wednesday's 4-week high but then fell back on some pre-weekend long liquidation pressure after the rally seen in the past 1.5 weeks. That rally was supported by some lower production figures this week.
Nat-gas prices on Friday were undercut by forecasts that shifted cooler for the northern Midwest and Southwest for Sep 10-14, which should reduce air-conditioning demand. Meanwhile, forecasts shifted cooler for the Northeast later in the Sep 15-19 period, but warmer for the Midwest and Mid-South.
Higher US nat-gas production has recently been a bearish factor for prices. On August 12, the EIA raised its forecast for 2025 US nat-gas production by +0.5% to 106.44 bcf/day from July's estimate of 105.9 bcf/day. The EIA raised its forecast for 2026 US nat-gas production by +0.7% to 106.09 from July's 105.4 bcf/day forecast. 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 108.2 bcf/day (+5.6% y/y), according to BNEF. Lower-48 state gas demand on Friday was 74.4 bcf/day (-3.7% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 15.2 bcf/day (+3.6% w/w), according to BNEF.
As a bearish factor for gas prices, the Edison Electric Institute reported Thursday that US (lower-48) electricity output in the week ended August 30 fell -7.82% y/y to 85,603 GWh (gigawatt hours), although US electricity output in the 52-week period ending August 30 rose +2.77% y/y to 4,263,700 GWh.
Thursday's weekly EIA report was neutral for nat-gas prices since nat-gas inventories for the week ended August 29 rose +55 bcf, right in line with the market consensus, though above the 5-year weekly average of +36 bcf. As of August 29, nat-gas inventories were down -2.2% y/y, but were +5.6% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of September 1, gas storage in Europe was 78% full, compared to the 5-year seasonal average of 85% 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 5 fell by -1 to 118 rigs, down from 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.
