December Nymex natural gas (NGZ24) on Monday plunged by -0.229 (-7.41%).
Dec nat-gas prices on Monday plunged on warmer-than-normal weather forecasts for the US, which would reduce heating demand for nat-gas. Maxar is forecasting above-normal temperatures in the US for Nov 7-19, with mixed temps for Nov 2-6, when Maxar is forecasting slightly below-normal temps in the West and above-normal temps in the East.
US nat-gas prices Monday were also undercut by a drop of more than -2% in European gas prices, which was driven by relief that Israel's retaliatory attack on Iran over the weekend was limited in scope and might mean the end of direct attacks between Iran and Israel for the time being.
Lower-48 state dry gas production Monday was 102.9 bcf/day (-0.3% y/y), according to BNEF. Lower-48 state gas demand Monday was 72.6 bcf/day (+6.2% y/y), according to BNEF. LNG net flows to US LNG export terminals Friday were 13.2 bcf/day (+5.7% 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 last Wednesday that total US (lower-48) electricity output in the week ended October 19 rose +2.59% y/y to 70,893 GWh (gigawatt hours), and US electricity output in the 52-week period ending October 19 rose +1.68% y/y to 4,160,757 GWh.
Last Thursday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended October 18 rose +80 bcf, above expectations of +68 bf and above the 5-year average build for this time of year of +76 bcf. As of October 18, nat-gas inventories were up +2.3% y/y and were +4.6% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 95% full as of October 22, above the 5-year seasonal average of 92% 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 October 25 rose by +2 rigs to 101 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.
