March Nymex natural gas (NGH25) on Tuesday closed up by +0.075 (+2.18%).
Mar nat-gas prices Tuesday climbed to a 2-1/2 week high and settled moderately higher. Nat-gas prices rallied on expectations for colder US temperatures that would boost heating demand for nat-gas. The Commodity Weather Group said Tuesday that forecasts for most of the continental US shifted colder for February 16-20.
Tightness in US nat-gas supplies is supportive of prices. Last Thursday's weekly EIA inventory report showed that US nat-gas inventories as of January 31 were -4.4% below the five-year average, the lowest level in over 2 years.
Lower-48 state dry gas production Tuesday was 105.2 bcf/day (-0.9% y/y), according to BNEF. Lower-48 state gas demand Tuesday was 113.3 bcf/day (+28.1% y/y), according to BNEF. LNG net flows to US LNG export terminals Tuesday were 15.2 bcf/day (+10.9% 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 last Wednesday that total US (lower-48) electricity output in the week ended February 1 rose +6.2% y/y to 81,767 GWh (gigawatt hours), and US electricity output in the 52-week period ending February 1 rose +2.5% y/y to 4,203,156 GWh.
Last Thursday's weekly EIA report was bullish for nat-gas prices since nat-gas inventories for the week ended January 31 fell -174 bcf, a larger draw than expectations of -171 bcf and right on the 5-year average draw for this time of year. As of January 31, nat-gas inventories were down -7.2% y/y and -4.4% below their 5-year seasonal average, signaling tight nat-gas supplies. In Europe, gas storage was 48% full as of February 9, below the 5-year seasonal average of 57% 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 February 7 rose +2 to 100 rigs, modestly above the 3-1/2 year low from September 6 of 94 rigs. Active rigs have fallen since posting a 5-1/4 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).
