February Nymex natural gas (NGG25) on Monday closed down by -0.055 (-1.38%).
Feb nat-gas prices Monday fell from a 1-year nearest-futures high and settled moderately lower. Nat-gas prices Monday initially rallied sharply to a 1-year high on the outlook for cold US temperatures to boost heating demand for nat-gas. However, long liquidation emerged after forecaster Maxar Technologies said there is a potential for warmer US temperatures to develop toward the end of this month.
Lower-48 state dry gas production Monday was 103.2 bcf/day (+3.6% y/y), according to BNEF. Lower-48 state gas demand Monday was 115.5 bcf/day (+0.6% y/y), according to BNEF. LNG net flows to US LNG export terminals Monday were 13.9 bcf/day (-6.3% w/w), according to BNEF.
A decline in US electricity output is negative 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 January 4 fell -2.73% y/y to 77,5180 GWh (gigawatt hours), although US electricity output in the 52-week period ending January 4 rose +2.37% y/y to 4,179,498 GWh.
Last Wednesday's weekly EIA report was slightly bearish for nat-gas prices since nat-gas inventories for the week ended January 3 fell -40 bcf, a smaller draw than expectations of -42 and much less than the 5-year average draw for this time of year of -93 bcf. As of January 3, nat-gas inventories were up +1.1% y/y and were +6.5% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 69% full as of January 7, below the 5-year seasonal average of 75% 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 January 10 fell -3 to 100 rigs, modestly above the 3-1/2 year low from September 6 of 94 rigs. Active rigs have fallen since posting a 5-1/4 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).
