November Nymex natural gas (NGX25) on Wednesday closed down by -0.012 (-0.40%).
Nov nat-gas prices on Wednesday extended Tuesday's losses to a new 3-week low. Warmer-than-normal US weather forecasts, which are expected to lead to reduced heating demand for natural gas, are weighing on gas prices. On Wednesday, forecaster Atmospheric G2 stated that temperatures across most of the US for October 20-24 will be above normal, as "there are still no signs of any noteworthy cold air intrusions and no appreciable cold air over Canada." Also, temperatures in the interior of North America are expected to remain warmer-than-normal for October 25-29.
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 Wednesday was 108.5 bcf/day (+5.8% y/y), according to BNEF. Lower-48 state gas demand on Wednesday was 71.3 bcf/day (-4.8% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Wednesday were 16.7 bcf/day (+6.7% 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 October 4 rose +2.91% y/y to 80,972 GWh (gigawatt hours), and US electricity output in the 52-week period ending October 4 rose +2.89% y/y to 4,274,208 GWh.
The consensus is that Thursday's weekly EIA nat-gas inventories increased by +83 bcf in the week ended October 10.
Last Thursday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended October 3 rose +80 bcf, above the market consensus of +77 bcf but below the 5-year weekly average of +94 bcf. As of October 3, nat-gas inventories were up +0.3% y/y, and were +4.5% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of October 13, 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 last Friday that the number of active US nat-gas drilling rigs in the week ending October 10 rose by +2 to 120 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.
