October Nymex natural gas (NGV24) on Friday closed up by +0.086 (+3.66%).
Oct nat-gas prices Friday rallied to a 2-1/2 month high on the outlook for warmer US temperatures that will boost nat-gas demand from electricity providers to run air conditioning. NatGasWeather said warmer-than-normal temperatures are expected across most of the US from September 26-October 3.
Nat-gas prices extended their gains Friday after NatGasWeather said there are "increasing odds a tropical cyclone will strengthen in the Gulf of Mexico next week" that could "lead to another round of oil and gas platform shut-ins in the Gulf of Mexico that reduce production."
Lower-48 state dry gas production Friday was 100.5 bcf/day (-0.4% y/y), according to BNEF. Lower-48 state gas demand Thursday was 70.7 bcf/day (+7.1% y/y), according to BNEF. LNG net flows to US LNG export terminals Friday were 12,3 bcf/day (+6.9% 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 14 rose +0.51% y/y to 80,674 GWh (gigawatt hours), and US electricity output in the 52-week period ending September 14 rose +1.42% y/y to 4,141,969 GWh.
Thursday's weekly EIA report was mildly bearish for nat-gas prices since nat-gas inventories for the week ended September 13 rose +58 bcf, above expectations of +56 but well below the 5-year average build for this time of year of +80 bcf. As of September 13, nat-gas inventories were up +5.4% y/y and were +8.6% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 93% full as of September 15, above the 5-year seasonal average of 88% 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 20 fell by -1 rigs to 96 rigs, just 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.
