November Nymex natural gas (NGX24) on Friday closed up by +0.149 (+5.41%).
Nov nat-gas prices Friday surged to a 3-1/4 month high and settled sharply higher. Nat-gas prices rose on carryover support from Thursday when weekly EIA nat-gas inventories rose less than expected. Also, commodity fund buying supported nat-gas prices, with Friday being the first day that the November nat-gas contract became the front month, prompting traders and hedgers to roll their expired October nat-gas positions into the November contract.
Lower-48 state dry gas production Friday was 100.2 bcf/day (-0.6% y/y), according to BNEF. Lower-48 state gas demand Friday was 68.3 bcf/day (-1.7% y/y), according to BNEF. LNG net flows to US LNG export terminals Friday were 12.6 bcf/day (+1.9% 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 electricity output in the week ended September 21 rose +9.23% y/y to 83,729 GWh (gigawatt hours), and US electricity output in the 52-week period ending September 21 rose +1.66% y/y to 4,149,047 GWh.
Thursday's weekly EIA report was bullish for nat-gas prices since nat-gas inventories for the week ended September 20 rose +47 bcf, below expectations of +52 and well below the 5-year average build for this time of year of +88 bcf. As of September 20, nat-gas inventories were up +4.0% y/y and were +7.1% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 94% full as of September 22, above the 5-year seasonal average of 89% full for this time of year.
Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ending September 27 rose by +3 rigs to 99 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.
