October Nymex natural gas (NGV24) on Thursday closed up by +0.087 (+3.83%).
Oct nat-gas prices Thursday jumped to a 3-week high on a lower-than-expected build in weekly EIA nat-gas supplies. The EIA reported Thursday that weekly nat-gas inventories rose +40 bcf, below expectations of +48 bcf.
Nat-gas prices also saw support from forecasts for warmer US weather that will boost nat-gas demand from electricity providers to run air conditioning. NatGasWeather said Thursday that warmer-than-normal temperatures are expected across most of the US into the end of this month.
Lower-48 state dry gas production Thursday was 99.5 bcf/day (-1.1% y/y), according to BNEF. Lower-48 state gas demand Thursday was 70.5 bcf/day (-2.5% y/y), according to BNEF. LNG net flows to US LNG export terminals Thursday were 11.9 bcf/day (-10.9% w/w), according to BNEF.
A decrease in US electricity output is negative for nat-gas demand from utility providers. The Edison Electric Institute reported Wednesday that total US electricity output in the week ended September 7 fell -8.05% y/y to 82,941 GWh (gigawatt hours), although US electricity output in the 52-week period ending September 7 rose +1.46% y/y to 4,141,562 GWh.
Thursday's weekly EIA report was bullish for nat-gas prices since nat-gas inventories for the week ended September 6 rose +40 bcf, below expectations of +48 and well below the 5-year average build for this time of year of +67 bcf. As of September 6, nat-gas inventories were up +5.7% y/y and were +9.6% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 93% full as of September 9, above the 5-year seasonal average of 87% 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 September 6 fell by -1 rig to a 3-1/3 year low of 94 rigs. Active rigs have fallen back 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.
