November Nymex natural gas (NGX25) on Tuesday closed up +0.036 (+1.10%).
Nov nat-gas prices rallied to a 2.25-month nearest-futures high on Tuesday and settled higher on the outlook for colder US weather next month to boost heating demand for nat-gas. According to forecaster Atmospheric G2, forecasts have shifted cooler in the West for October 6-10, and a general cooler risk is expected across most of the US for later in the October 10-14 period.
Higher US nat-gas production has recently been a bearish factor for prices. Earlier this month, 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 Tuesday was 107.9 bcf/day (+5.5% y/y), according to BNEF. Lower-48 state gas demand on Tuesday was 70.4 bcf/day (-1.3% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Tuesday were 15.7 bcf/day (+7.8% 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 20 rose +2.3% y/y to 85,663 GWh (gigawatt hours), and US electricity output in the 52-week period ending September 20 rose +2.85% y/y to 4,267,164 GWh.
Last Thursday's weekly EIA report was neutral for nat-gas prices since nat-gas inventories for the week ended September 19 rose +75 bcf, just above the market consensus of +74 bcf but below the 5-year weekly average of +76 bcf. As of September 19, nat-gas inventories were up +0.5% y/y, and were +6.1% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of September 28, gas storage in Europe was 83% full, compared to the 5-year seasonal average of 89% 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 September 26 fell by -1 to 117 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.
