October Nymex natural gas (NGV25) on Thursday closed up +0.010 (+0.33%).
Oct nat-gas prices on Thursday extended the 1-week rally and nearly matched Wednesday's 4-week high on forecasts for warmer temperatures in the northern half of the US, which will boost nat-gas demand from electricity providers to run air conditioning. On Thursday, forecaster Atmospheric G2 said forecasts shifted warmer for the middle of the country for September 9-13 and for the northern half of the country for Sep 14-18, although temperatures should moderate in the East and West for Sep 9-13.
Ramped-up US nat-gas production is a bearish factor for prices. On August 12, the EIA raised its forecast for 2025 US nat-gas production by +0.5% to 106.44 bcf/day from July's estimate of 105.9 bcf/day. The EIA raised its forecast for 2026 US nat-gas production by +0.7% to 106.09 from July's 105.4 bcf/day forecast. 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 Thursday was 107.1 bcf/day (+4.6% y/y), according to BNEF. Lower-48 state gas demand on Thursday was 75.5 bcf/day (+1.4% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Thursday were 15.0 bcf/day (-3.5% w/w), according to BNEF.
As a bearish factor for gas prices, the Edison Electric Institute reported Thursday that US (lower-48) electricity output in the week ended August 30 fell -7.82% y/y to 85,603 GWh (gigawatt hours), although US electricity output in the 52-week period ending August 30 rose +2.77% y/y to 4,263,700 GWh.
Thursday's weekly EIA report was neutral for nat-gas prices since nat-gas inventories for the week ended August 29 rose +55 bcf, right in line with the market consensus, although above the 5-year weekly average of +36 bcf. As of August 29, nat-gas inventories were down -2.2% y/y, but were +5.6% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of September 1, gas storage in Europe was 78% full, compared to the 5-year seasonal average of 85% 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 August 29 fell by -3 to 122 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-year low of 94 rigs reported in September 2024.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
