November Nymex natural gas (NGX25) on Tuesday closed down -0.097 (-2.82%).
Nov nat-gas prices on Tuesday fell as forecasts shifted warmer for the eastern half of the US for Nov 2-6, although temperatures remain below normal, according to Vaisala. For Nov 7-11, forecasts shifted warmer. The warmer forecasts imply reduced heating demand in the northern US.
US (lower-48) dry gas production on Tuesday was 106.6 bcf/day (+2.7% y/y), according to BNEF. Lower-48 state gas demand on Tuesday was 78.2 bcf/day (+6.7% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Tuesday were 16.4 bcf/day (-0.5% w/w), according to BNEF.
Higher US nat-gas production is a bearish factor for prices. On October 7, 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.
As a supportive factor for gas prices, the Edison Electric Institute reported last Wednesday that US (lower-48) electricity output in the week ended October 18 rose +4.0% y/y to 73,756 GWh (gigawatt hours), and US electricity output in the 52-week period ending October 18 rose +2.89% y/y to 4,280,821 GWh.
Last Thursday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended October 17 rose +87 bcf, above the market consensus of +83 bcf and the 5-year weekly average of +77 bcf. As of October 17, nat-gas inventories were up +0.6% y/y and were +4.5% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of October 21, gas storage in Europe was 83% full, compared to the 5-year seasonal average of 92% 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 24 was unchanged at 121 rigs, just below the 2.25-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.
