November Nymex Natural Gas (NGX25) closed up +0.389 (+12.93%) on Monday.
Nat-gas in November hit a 1.5-week high on Monday and came sharply higher on forecasts cooler US temperatures will boost heating demand for nat-gas. Forecaster Atmospheric G2 said on Monday that the forecast calls for a cold increase in the northeastern and central regions of the US for October 25-29 and for the eastern two-thirds of the country for October 30 to November 3.
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US (bottom-48) dry gas production was 107.2 Bcf/day (+3.8% y/y) on Monday, according to BNEF. Lower-48 state gas demand on Monday was 69.5 Bcf/day (+6.9% y/y), according to BNEF. According to BNEF, estimated LNG net flows at US LNG export terminals on Monday were 16.3 Bcf/day (-0.3% w/w). U.S. net-gas pipeline exports to Mexico rose to a record 7.5 Bcf/day in May, according to a report from the EIA on Monday.
Higher US net-gas production is a bearish factor for prices. On October 7, the EIA raised its forecast for 2025 US net-gas production by +0.5% to 107.14 Bcf/day from a September estimate of 106.60 Bcf/day. US net-gas production is currently near record highs, with active US net-gas rigs recently hitting a 2-year high.
As a supportive factor for gas prices, the Edison Electric Institute reported last Thursday that US (bottom-48) electricity production increased +5.1% y/y to 77,390 GWh (gigawatt hours) in the week ending October 11, and US electricity production increased +2.86% y/y to 4,277,958 GWh in the 52-week period ending October 11.
Last Thursday’s weekly EIA report was supportive for net-gas prices as net-gas inventories increased to +80 Bcf for the week ended October 10, below the market consensus of +81 Bcf and the 5-year weekly average of +83 Bcf. As of October 10, net-gas inventories were up +0.4% year-on-year, and +4.3% above their 5-year seasonal average, indicating adequate net-gas supply. As of October 18, gas storage in Europe was 83% full, compared to the 5-year seasonal average at this time of year of 92% full.
Baker Hughes reported last Friday that the number of active U.S. net-gas drilling rigs increased +1 to 121 rigs in the week ended Oct. 17, just below the 2-year high of 124 rigs posted on Aug. 1. Over the past year, the gas rig count has risen from a 4.5-year low of 94 rigs reported in September 2024.
On the date of publication, Rich Asplund did not have (directly or indirectly) any positions in any securities mentioned in this article. All information and data in this article is for informational purposes only. Please see the Barchart Disclosure Policy here for more information.
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