November Nymex natural gas (NGX25) on Thursday closed down by -0.106 (-3.07%).
Nov nat-gas prices retreated on Thursday from a greater-than-expected build in weekly nat-gas storage. The EIA reported on Thursday that nat-gas inventories rose +87 bcf in the week ended October 17, above expectations of +83 bcf and the five-year average of +77 bcf.
A mixed weather forecast also undercut nat-gas prices on Thursday after forecaster Atmospheric G2 said forecasts shifted cooler in the southern and eastern US for October 28-November 1 but warmer elsewhere. Also, forecasts turned cooler over the eastern half of the US and warmer over the western region for November 2-6.
US (lower-48) dry gas production on Thursday was 107.9 bcf/day (+5.4% y/y), according to BNEF. Lower-48 state gas demand on Thursday was 75.5 bcf/day (+3.4% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Thursday were 16.6 bcf/day (+1.0% w/w), according to BNEF. According to a report from the EIA on Monday, US nat-gas pipeline exports to Mexico rose to a record 7.5 bcf/day in May.
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 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.
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 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.
