December Nymex natural gas (NGZ24) on Monday closed up by +0.118 (+4.43%)
Dec nat-gas prices Monday recovered from early losses and rallied sharply as short covering emerged on forecasts for colder US temperatures, which could boost heating demand for nat-gas. On Monday, the Commodity Weather Group said forecasts have shifted colder for parts of the West and central US from November 14-18.
Lower-48 state dry gas production Monday was 100.5 bcf/day (-4.9% y/y), according to BNEF. Lower-48 state gas demand Monday was 73.6 bcf/day (+1.5% y/y), according to BNEF. LNG net flows to US LNG export terminals Monday were 12.8 bcf/day (-2.2% w/w), according to BNEF.
An increase in US electricity output is positive for nat-gas demand from utility providers. The Edison Electric Institute reported last Wednesday that total US (lower-48) electricity output in the week ended October 26 rose +0.11% y/y to 71,417 GWh (gigawatt hours), and US electricity output in the 52-week period ending October 26 rose +1.62% y/y to 4,160,833 GWh.
Last Thursday's weekly EIA report was slightly bearish for nat-gas prices since nat-gas inventories for the week ended October 25 rose +78 bcf, below expectations of +83 bf but above the 5-year average build for this time of year of +67 bcf. As of October 25, nat-gas inventories were up +2.2% y/y and were +4.8% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 95% full as of October 29, above the 5-year seasonal average of 93% 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 November 1 rose by +1 rig to 102 rigs, modestly above the 3-1/3 year low from September 6 of 94 rigs. Active rigs have fallen since posting a 5-year high of 166 rigs in Sep 2022, up from the pandemic-era record low of 68 rigs posted in July 2020 (data since 1987).
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.
