December Nymex natural gas (NGZ24) on Wednesday closed up by +0.077 (+2.88%)
Dec nat-gas prices Wednesday moved higher after a midday weather update called for colder temperatures for the central and eastern parts of the US late next week, which will boost heating demand for nat-gas. Forecaster Maxar Technologies said Wednesday that forecasts shifted a "decent bit colder" for most of the central and eastern parts of the US for November 14-17.
Lower-48 state dry gas production Wednesday was 99.6 bcf/day (-5.9% y/y), according to BNEF. Lower-48 state gas demand Wednesday was 77.3 bcf/day (+8.3% y/y), according to BNEF. LNG net flows to US LNG export terminals Wednesday were 13.2 bcf/day (+2.3% 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.
The consensus is that Thursday's weekly EIA nat-gas inventories will climb by +68 bcf, more than twice the five-year average for this time of year at +32 bcf.
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 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.
