November Nymex natural gas (NGX24) on Friday closed up +0.038 (+1.51%).
Nov nat-gas prices posted moderate gains on Friday and remained below Thursday's 1-1/2 week high. Nat-gas prices Friday garnered carryover support from a rally in European gas prices to a 10-3/4 month high. Gains in nat-gas were limited on the outlook for warm US autumn temperatures, which will curb heating demand for nat-gas. On Friday, NatGasWeather said that temperatures for the eastern two-thirds of the US will be above normal for November 1-7.
Lower-48 state dry gas production Friday was 101.3 bcf/day (-1.8% y/y), according to BNEF. Lower-48 state gas demand Friday was 73.5 bcf/day (+5.7% y/y), according to BNEF. LNG net flows to US LNG export terminals Friday were 12.7 bcf/day (-5.0% 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 Wednesday that total US (lower-48) electricity output in the week ended October 19 rose +2.59% y/y to 70,893 GWh (gigawatt hours), and US electricity output in the 52-week period ending October 19 rose +1.68% y/y to 4,160,757 GWh.
Thursday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended October 18 rose +80 bcf, above expectations of +68 bf and above the 5-year average build for this time of year of +76 bcf. As of October 18, nat-gas inventories were up +2.3% y/y and were +4.6% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 95% full as of October 22, above the 5-year seasonal average of 92% full for this time of year.
Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ending October 25 rose by +2 rigs to 101 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.
