December Nymex natural gas (NGZ24) on Thursday closed down by -0.054 (-1.97%)
Dec nat-gas prices retreated Thursday after weekly EIA supplies rose more than expected. The EIA reported that nat-gas inventories for the week of November 1 rose +69 bcf, which was above expectations of +68 bcf and more than twice the five-year average for this time of year of +32 bcf. A mixed weather forecast also weighed on nat-gas prices after Atmospheric G2 said Thursday that forecasts for the eastern half of the US swung cooler while the western part of the country moved warmer for November 12-16.
Lower-48 state dry gas production Thursday was 100.2 bcf/day (-4.5% y/y), according to BNEF. Lower-48 state gas demand Thursday was 78.8 bcf/day (+6.4% y/y), according to BNEF. LNG net flows to US LNG export terminals Thursday were 12.7 bcf/day (-2.4% 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 November 2 rose +1.24% y/y to 73,690 GWh (gigawatt hours), and US electricity output in the 52-week period ending November 2 rose +1.56% y/y to 4,161,739 GWh.
Thursday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended November 1 rose +69 bcf, above expectations of +68 bcf and well above the 5-year average build for this time of year of +32 bcf. As of November 1, nat-gas inventories were up +4.2% y/y and were +5.8% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 95% full as of November 3, 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.
