October Nymex natural gas (NGV23) on Monday closed +0.002 (+0.08%).
Nat-gas prices Monday closed slightly higher on a mixed weather outlook. According to forecaster Maxar Technologies, above-normal temperatures are expected in the central U.S., moderate temperatures in the east, and cooler temperatures in the west from September 30-October 4. U.S. nat-gas prices had carryover support from a rally in European nat-gas prices Monday to a 3-1/4 month high.
Lower-48 state dry gas production Monday was 100.9 bcf/day (+1.3% y/y), according to BNEF. Lower-48 state gas demand Monday was 67.5 bcf/day, +13.2% y/y, according to BNEF. LNG net flows to U.S. LNG export terminals Monday were 12.0 bcf/day or -9.0% w/w.
High inventories caused by carryover from the mild 2022/23 winter and weak heating demand have undercut nat-gas prices. Gas storage across Europe was 94% full as of September 18, well above the 5-year seasonal average of 85% full for this time of year. U.S. nat-gas inventories as of September 15 were +5.9% above their 5-year seasonal average.
An increase in U.S. electricity output is bullish for nat-gas demand from utility providers. The Edison Electric Institute reported last Wednesday that total U.S. electricity output in the week ended September 16 rose +2.3% y/y to 80,267 GWh (gigawatt hours). However, cumulative U.S. electricity output in the 52-week period ending September 16 fell -0.9% y/y to 4,083,880 GWh.
Last Thursday's weekly EIA report of +64 bcf for the week ended September 15 was neutral for nat-gas prices since it was close to expectations of +65 bcf, although below the 5-year average for this time of year at +84 bcf. As of September 15, nat-gas inventories were up +13.7% y/y and were +5.9% above their 5-year seasonal average, signaling ample nat-gas supplies.
Baker Hughes reported last Friday that the number of active U.S. nat-gas drilling rigs in the week ended September 22 fell by -3 to 118 rigs, modestly above the 19-month low of 113 rigs from September 8. Active rigs rose to a 4-year high of 166 rigs in September 2022. Active rigs have roughly doubled from the 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.
