January Nymex natural gas (NGF25) on Tuesday closed down by -0.019 (-0.60%)
Jan nat-gas prices on Tuesday settled moderately lower on the outlook for warmer US weather, which will reduce heating demand for nat-gas and keep supplies well above average. The Commodity Weather Group said Tuesday that forecasts have shifted warmer for the eastern half of the US for December 15-19.
Warmer winter temperatures could keep US nat-gas supplies elevated, a bearish price factor. US nat-gas inventories as of November 29 are +7.8% above their 5-year seasonal average for this time of year, signaling ample nat-gas supplies.
Lower-48 state dry gas production Tuesday was 103.9 bcf/day (-1.7% y/y), according to BNEF. Lower-48 state gas demand Tuesday was 93 bcf/day (+1.5% y/y), according to BNEF. LNG net flows to US LNG export terminals Tuesday were 13.3 bcf/day (+1.1% w/w), according to BNEF.
A decline in US electricity output is negative for nat-gas demand from utility providers. The Edison Electric Institute reported last Wednesday that total US (lower-48) electricity output in the week ended November 30 fell -3.94% y/y to 74,881 GWh (gigawatt hours), although US electricity output in the 52-week period ending November 30 rose +1.76% y/y to 4,165,120 GWh.
Last Thursday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended November 29 fell -30 bcf versus expectations of -36 bcf and less than the 5-year average draw for this time of year of -47 bcf. As of November 22, nat-gas inventories were up +5.9% y/y and were +7.8% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 82% full as of December 8, below the 5-year seasonal average of 84% 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 December 6 rose +2 rigs to 102 rigs, modestly above the 3-1/2 year low from September 6 of 94 rigs. Active rigs have fallen since posting a 5-1/4 year high of 166 rigs in Sep 2022, up from the pandemic-era record low of 68 rigs posted in July 2020 (data since 1987).
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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