December Nymex natural gas (NGZ25) on Friday closed down by -0.080 (-1.72%).
Dec nat-gas prices retreated on Friday due to a larger-than-expected build in weekly nat-gas storage. The EIA reported Friday that nat-gas inventories rose +45 bcf for the week ended November 7, higher than expectations of a +34 bcf build. Nat-gas prices extended their losses on Friday amid forecasts of warmer US temperatures, which could reduce nat-gas heating demand. Forecaster Atmospheric G2 said Friday that forecasts shifted warmer in the US, except in parts of the East, for November 19-23, and shifted even warmer across much of North America for November 24-28.
On Thursday, nat-gas prices rallied to an 8.25-month nearest futures high after colder-than-normal US temperatures boosted heating demand for nat-gas.
Higher US nat-gas production is a bearish factor for prices. On Wednesday, the EIA raised its forecast for 2025 US nat-gas production by +1.0% to 107.67 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.
US (lower-48) dry gas production on Friday was 109.9 bcf/day (+7.1% y/y), according to BNEF. Lower-48 state gas demand on Friday was 80.0 bcf/day (-5.5% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 17.7 bcf/day (+5.9% w/w), according to BNEF.
As a supportive factor for gas prices, the Edison Electric Institute reported Thursday that US (lower-48) electricity output in the week ended November 8 rose +0.12% y/y to 73,383 GWh (gigawatt hours), and US electricity output in the 52-week period ending November 8 rose +2.84% y/y to 4,282,302 GWh.
Friday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended November 7 rose +45 bcf, above the market consensus of +34 bcf and the 5-year weekly average of +35 bcf. As of November 7, nat-gas inventories were down -0.3% y/y and were +4.5% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of November 12, gas storage in Europe was 82% full, compared to the 5-year seasonal average of 91% full for this time of year.
Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ending November 14 fell by -3 to 125 rigs, falling back from a 2.25-year high of 128 rigs on November 7. In the past year, the number of gas rigs has risen from the 4.5-year low of 94 rigs reported in September 2024.
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.
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