November Nymex natural gas (NGX25) on Friday closed up by +0.070 (+2.38%).
Nov nat-gas prices on Friday recovered from a 3-week low and settled higher. Short-covering emerged in nat-gas futures on Friday to push prices higher after US weather forecasts turned colder, potentially boosting heating demand for nat gas. Forecaster Atmospheric G2 said on Friday that forecasts shifted cooler for the Northeast and West Coast for October 22-26, and shifted cooler for the West and Southeast for October 27-31.
Higher US nat-gas production is also a bearish factor for prices. Last Tuesday, 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.
US (lower-48) dry gas production on Friday was 107.9 bcf/day (+3.7% y/y), according to BNEF. Lower-48 state gas demand on Friday was 69.7 bcf/day (-6.0% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 16.2 bcf/day (+2.3% w/w), according to BNEF.
As a supportive factor for gas prices, the Edison Electric Institute reported Thursday that US (lower-48) electricity output in the week ended October 11 rose +5.1% y/y to 77,390 GWh (gigawatt hours), and US electricity output in the 52-week period ending October 11 rose +2.86% y/y to 4,277,958 GWh.
Thursday's weekly EIA report was supportive for nat-gas prices since nat-gas inventories for the week ended October 10 rose +80 bcf, below the market consensus of +81 bcf and below the 5-year weekly average of +83 bcf. As of October 10, nat-gas inventories were up +0.4% y/y, and were +4.3% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of October 15, gas storage in Europe was 83% full, compared to the 5-year seasonal average of 91% 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 17 rose by +1 to 121 rigs, just 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.
