December Nymex natural gas (NGZ24) on Thursday closed sharply lower by -0.198 (-6.64%)
Dec nat-gas prices sold off Thursday after weekly EIA nat-gas supplies rose more than expected. The EIA reported that nat-gas inventories the week of November 8 rose by +42 bcf, above expectations of +39 bcf and well above the five-year average for this time of year of +29 bcf. Nat-gas prices fell despite the outlook for cooler US temperatures that will boost heating demand for nat-gas. Forecaster Maxar Technologies said forecasts shifted cooler for the West Coast, with colder temperatures moving eastward later in the November 18-22 period.
Lower-48 state dry gas production Thursday was 100.9 bcf/day (-3.5% y/y), according to BNEF. Lower-48 state gas demand Thursday was 82.2 bcf/day (-1.5% y/y), according to BNEF. LNG net flows to US LNG export terminals Thursday were 13.9 bcf/day (+10% 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 9 rose +3.19% y/y to 73,297 GWh (gigawatt hours), and US electricity output in the 52-week period ending November 9 rose +1.6% y/y to 4,164,003 GWh.
Thursday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended November 8 rose +42 bcf, above expectations of +39 bcf and well above the 5-year average build for this time of year of +29 bcf. As of November 8, nat-gas inventories were up +3.7% y/y and were +6.1% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 93% full as of November 10, slightly 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 November 8 was unchanged at 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).
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