November Nymex natural gas (NGX25) on Monday closed up +4.18%, regaining most of the losses seen later last week.
Nov nat-gas prices rallied on Monday as US weather forecasts turned cooler, which would boost heating demand in the northern parts of the country. Atmospheric G2 said that forecasts shifted cooler for much of the central and eastern US for Nov 1-5, and also cooler for the East for Nov 6-10.
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US (lower-48) dry gas production on Monday was 108.2 bcf/day (+4.2% y/y), according to BNEF. Lower-48 state gas demand on Monday was 75.1 bcf/day (+4.2% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Monday were 16.6 bcf/day (+1.5% w/w), according to BNEF.
Higher US nat-gas production is a bearish factor for prices. On October 7, the EIA raised its forecast for 2025 US nat-gas production by +0.5% to 107.14 bcf/day from September’s estimate of 106.60 bcf/day. US nat-gas production is currently near a record high, with active US nat-gas rigs recently posting a 2-year high.
As a supportive factor for gas prices, the Edison Electric Institute reported last Wednesday that US (lower-48) electricity output in the week ended October 18 rose +4.0% y/y to 73,756 GWh (gigawatt hours), and US electricity output in the 52-week period ending October 18 rose +2.89% y/y to 4,280,821 GWh.
Last Thursday’s weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended October 17 rose +87 bcf, above the market consensus of +83 bcf and the 5-year weekly average of +77 bcf. As of October 17, nat-gas inventories were up +0.6% y/y and were +4.5% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of October 21, gas storage in Europe was 83% full, compared to 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 24 was unchanged at 121 rigs, just below the 2.25-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.
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