October Nymex natural gas (NGV25) on Friday closed down -0.069 (-2.38%).
Oct nat-gas retreated on Friday due to ample storage and warming forecasts for October, which lowers the chances of early-season heating demand for nat-gas. As of September 19, nat-gas inventories were +6.1% above their 5-year seasonal average, signaling abundant nat-gas supplies.
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Warmer-than-normal US temperatures for early autumn are negative for nat-gas prices as the warm weather will curb heating demand for nat -gas. Forecaster Atmospheric G2 said Friday that forecasts shifted warmer over the middle of the US for October 1-5, and forecasts remained above-normal across most of the US for October 6-10.
Higher US nat-gas production has recently been a bearish factor for prices. Earlier this month, the EIA raised its forecast for 2025 US nat-gas production by +0.2% to 106.63 bcf/day from August's estimate of 106.40 bcf/day. US nat-gas production is currently near a record high, with active US nat-gas rigs recently posting a 2-year high.
US (lower-48) dry gas production on Friday was 107.7 bcf/day (+6.8% y/y), according to BNEF. Lower-48 state gas demand on Friday was 70.4 bcf/day (-0.9% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 15.8 bcf/day (+1.3% w/w), according to BNEF.
As a supportive factor for gas prices, the Edison Electric Institute reported Wednesday that US (lower-48) electricity output in the week ended September 20 rose +2.3% y/y to 85,663 GWh (gigawatt hours), and US electricity output in the 52-week period ending September 20 rose +2.85% y/y to 4,267,164 GWh.
Thursday's weekly EIA report was neutral for nat-gas prices since nat-gas inventories for the week ended September 19 rose +75 bcf, just above the market consensus of +74 bcf but below the 5-year weekly average of +76 bcf. As of September 19, nat-gas inventories were up +0.5% y/y, and were +6.1% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of September 23, gas storage in Europe was 82% full, compared to the 5-year seasonal average of 89% 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 26 fell by -1 to 117 rigs, slightly below the 2-year high of 124 rigs posted on August 1. In the past year, the number of gas rigs has risen from the 4.5-year low of 94 rigs reported in September 2024.
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.
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