October Nymex natural gas (NGV25) on Tuesday closed up +0.027 (+0.87%).
Oct nat-gas prices on Tuesday settled higher but remained below Monday's 1-month high on forecasts for warmer late-summer US temperatures, which will boost nat-gas demand from electricity providers to power the increased air conditioning usage. Forecaster Atmospheric G2 said Tuesday that forecasts shifted warmer over the eastern two-thirds of the US for September 14-18 and shifted warmer for much of the East and West Coast US for September 19-23.
Higher US nat-gas production has recently been a bearish factor for prices. On Tuesday, the EIA raised its forecast for 2025 US nat-gas production by +0.2% to 106.63 bcf/day from August's estimate of 106.40 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 107.0 bcf/day (+4.6% y/y), according to BNEF. Lower-48 state gas demand on Tuesday was 70.4 bcf/day (-1.0% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Tuesday were 14.6 bcf/day (-5.5% w/w), according to BNEF.
As a bearish factor for gas prices, the Edison Electric Institute reported last 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.
Last 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, though 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 7, gas storage in Europe was 79% full, compared to the 5-year seasonal average of 86% 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 September 5 fell by -1 to 118 rigs, down from 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.
