October Nymex natural gas (NGV26) on Thursday closed down -0.043 (-1.45%).
Nat-gas prices fell from a 1.75-month nearest-futures high on Thursday and settled lower as US domestic supplies remain abundant. Nat-gas prices initially moved higher on Thursday after weekly EIA inventories rose +30 bcf, below expectations of +32 bcf. Also, the outlook for hot US weather to boost nat-gas demand from electricity providers to power increased air-conditioning use supported prices. According to forecaster Vaisala, forecasts shifted hotter in the central US for September 8-12, and that above-normal temperatures are forecast to be widespread for the September 13-17 period.
However, nat-gas prices gave up their advance and moved lower Thursday as US domestic storage remains abundant. As of August 28, nat-gas inventories were +5.2% above their 5-year seasonal average, signaling adequate nat-gas supplies.
US (lower-48) dry gas production on Thursday was 114.2 bcf/day (+5.6% y/y), according to BNEF. Lower-48 state gas demand on Thursday was 79.4 bcf/day (+5.8% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Thursday were 19.2 bcf/day (-1.7% w/w), according to BNEF.
As a positive factor for gas prices, the Edison Electric Institute reported Wednesday that US (lower-48) electricity output in the week ended August 29 rose +12.56% y/y to 96,357 GWh (gigawatt hours). Also, US electricity output in the 52 weeks ending August 29 rose +2.63% y/y to 4,375,966 GWh.
As a bearish factor, the US Energy Information Administration (EIA) on August 11 projected that US nat-gas storage levels will swell to 3,985 bcf at the end of October, the highest level in 10 years and 5% above the five-year average. On Monday, the EIA raised its 2027 US dry natural gas production estimate to 116.0 bcf/day from 115.3 bcf/day projected in July.
A bearish medium-term factor for nat-gas prices is speculation that a powerful El Niño weather system will bring warmer-than-normal temperatures to the Northern Hemisphere this fall and winter, reducing nat-gas heating demand.
Thursday's weekly EIA report supported nat-gas prices, showing a +30 bcf increase in US nat-gas inventories for the week ended August 28, below expectations of +33 bcf and below the 5-year weekly average of +37 bcf. As of August 28, nat-gas inventories were down -1.8% y/y and +5.2% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of August 31, gas storage in Europe was 65% full, compared to the 5-year seasonal average of 82% full for this time of year.
Baker Hughes reported last Friday that the number of active US nat-gas drilling rigs in the week ended August 28 rose by +5 to a 5-month high of 132 rigs, just below the 3-year high of 134 rigs set in February 2026.
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.