November Nymex natural gas (NGX25) on Tuesday closed down by -0.090 (-2.89%).
Nov nat-gas prices tumbled to a 3-week low on Tuesday and settled sharply lower. Prices are under pressure as forecasts for mild US weather through late October are expected to limit heating demand for nat-gas. On Tuesday, the Commodity Weather Group reported that above-normal temperatures are expected across most of the eastern half of the US for October 19-23.
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 Tuesday was 106.7 bcf/day (+3.8% y/y), according to BNEF. Lower-48 state gas demand on Tuesday was 66.4 bcf/day (-7.8% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Tuesday were 16.2 bcf/day (+7.7% 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.
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 12, 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.
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.
