December Nymex natural gas (NGZ26) closed down -0.110 (-3.29%) on Friday.
Dec nat-gas prices settled sharply lower on Friday after weekly EIA gas storage rose more than expected. The EIA reported Friday that nat-gas inventories rose by +61 bcf in the week ended November 6, well above the five-year average for the week of +40 bcf.
Losses in nat-gas prices accelerated Friday on forecasts for warmer US weather, potentially curbing heating demand for nat-gas. The Commodity Weather Group said Friday that forecasts shifted warmer, with above-average temperatures expected across the eastern half of the US for November 18-22.
Nat-gas prices sank to a 6.5-month nearest-futures low (X26) late last month as warm US autumn weather curbed heating demand for nat-gas and allowed US storage levels to climb. Also, expectations that the “Super El Niño” will bring warmer-than-normal temperatures to the Northern Hemisphere this winter and reduce nat-gas heating demand are weighing on prices.
US (lower-48) dry gas production on Friday was 114.7 bcf/day (+4.6% y/y), according to BNEF. Lower-48 state gas demand on Friday was 90.8 bcf/day (+11.5% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals Friday were 21.9 bcf/day (+5.4% 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 November 7 rose +2.4% y/y to 75,151 GWh (gigawatt-hours). Also, US electricity output in the 52 weeks ending November 7 rose +3.3% y/y to 4,425,114 GWh.
Tuesday’s monthly Short-Term Energy Outlook from the EIA was negative for nat-gas prices, as it raised its US 2026 nat-gas production estimate to 113 bcf/day from 112.2 bcf/day.
Friday's weekly EIA report was bearish for nat-gas prices, showing an increase of +61 bcf in the week ended November 6, above the 5-year average of +40 bcf. As of November 6, nat-gas inventories were down -2.5% y/y and +2.0% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of November 11, gas storage in Europe was 71% 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 ended November 13 fell by -4 to 127 rigs, modestly below the 3-year high of 135 rigs posted on September 25.
On the date of publication, Rich Asplund did not directly have a position 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.