November Nymex natural gas (NGX25) on Monday closed up sharply by +0.389 (+12.93%).
Nov nat-gas surged on Monday to a 1.5-week high and settled sharply higher on forecasts for colder US temperatures, which will boost heating demand for nat-gas. Forecaster Atmospheric G2 said Monday that forecasts shifted colder across the northeastern and central regions of the US for October 25-29 and shifted cooler over the eastern two-thirds of the country for October 30 to November 3.
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US (lower-48) dry gas production on Monday was 107.2 bcf/day (+3.8% y/y), according to BNEF. Lower-48 state gas demand on Monday was 69.5 bcf/day (+6.9% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Monday were 16.3 bcf/day (-0.3% w/w), according to BNEF. According to a report on Monday from the EIA, US nat-gas pipeline exports to Mexico rose to a record 7.5 bcf/day in May.
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 Thursday that US (lower-48) electricity output in the week ended October 11 rose +5.1% y/y to 77,390 GWh (gigawatt hours), and US electricity output in the 52-week period ending October 11 rose +2.86% y/y to 4,277,958 GWh.
Last Thursday’s weekly EIA report was supportive for nat-gas prices since nat-gas inventories for the week ended October 10 rose +80 bcf, below the market consensus of +81 bcf and below the 5-year weekly average of +83 bcf. As of October 10, nat-gas inventories were up +0.4% y/y, and were +4.3% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of October 18, 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 17 rose by +1 to 121 rigs, just 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.
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