November Nymex natural gas (NGX25) on Friday closed down by -0.118 (-3.43%).
Nov nat-gas prices added to Thursday's losses on Friday and settled lower. Forecasts for warm mid-October US weather, which will curb heating demand for nat-gas are weighing on prices. Forecaster Atmospheric G2 said Friday that forecasts shifted warmer across the middle of the US for October 8-12, and projections turned hotter across most of the country for October 13-17.
On Thursday, nat-gas prices jumped to a 2.5-month nearest-futures high due to a smaller-than-normal build in weekly gas storage. The EIA reported Thursday that nat-gas inventories rose +53 bcf for the week ended September 26, below expectations of +64 bcf.
Higher US nat-gas production has recently been a bearish factor for prices. Last 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 Friday was 108.4 bcf/day (+5.4% y/y), according to BNEF. Lower-48 state gas demand on Friday was 66.4 bcf/day (-7.4% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 15.7 bcf/day (-1.0% 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 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.
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 September 30, gas storage in Europe was 85% full, compared to the 5-year seasonal average of 90% full for this time of year.
Baker Hughes reported 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.
