October Nymex natural gas (NGV26) on Friday closed down -0.003 (-0.11%).
Nat-gas prices closed lower on Friday, weighed down by supply concerns after Thursday’s weekly EIA inventories report showed a +40 bcf increase in the week ended September 4, above expectations of +34 bcf.
Nat-gas prices have underlying support from forecasts of warm US weather that could boost nat-gas demand from electricity providers to meet air conditioning use. The Commodity Weather Group said above-average temperatures are expected across the South and Southeast through September 20. US nat-gas inventories are currently 4.8% above their 5-year seasonal average.
In a bearish medium-term factor for nat-gas prices, the market is expecting a “Super El Niño” to bring warmer-than-normal temperatures to the Northern Hemisphere this fall and winter, reducing heating demand for nat-gas.
US (lower-48) dry gas production on Friday was 113.8 bcf/day (+4.4% y/y), according to BNEF. Lower-48 state gas demand on Friday was 75.8 bcf/day (+7.5% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 19.8 bcf/day (+1.5% w/w), according to BNEF.
As a positive factor for gas prices, the Edison Electric Institute reported Thursday that US (lower-48) electricity output in the week ended September 5 rose +19.69% y/y to 100,302 GWh (gigawatt hours). Also, US electricity output in the 52 weeks ending September 5 rose +3.00% y/y to 4,392,478 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. Last 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.
Thursday's weekly EIA report was bearish for nat-gas prices, as it showed a +40 bcf increase in US nat-gas inventories for the week ended September 4, above expectations of +34 bcf, but below the 5-year weekly average of +52 bcf. As of September 4, nat-gas inventories were down -2.7% y/y and +4.8% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of September 8, gas storage in Europe was 67% full, compared to the 5-year seasonal average of 84% full for this time of year.
Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ended September 11 rose by +2 to 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.