March Nymex natural gas (NGH26) on Thursday closed higher by +0.044 (+1.27%).
March nat-gas prices settled higher on Thursday amid a record withdrawal of nat-gas storage. Â The EIA reported Thursday that nat-gas inventories fell -360 bcf in the week ended January 30, the largest weekly withdrawal from US gas storage sites on record and well above the five-year average for the week of -190 bcf. Â
Expectations of below-normal US temperatures, which will boost nat-gas heating demand, also lifted prices on Thursday after the Commodity Weather Group said forecasts showed very cold weather across the eastern US through February 9. Â However, nat-gas prices fell from their highs after forecasts showed warmer-than-normal temperatures across the Midwest and South through February 19.
Natural gas prices surged to a 3-year high last Wednesday, driven by the massive storm that just crossed the US and the Arctic blast of cold weather. Â The cold weather caused freeze-ups in gas wells, disrupted production in Texas and elsewhere, and drove a spike in demand for natural gas for heating. Â About 50 billion cubic feet of natural gas came offline last week, or about 15% of total US natural gas production.
US (lower-48) dry gas production on Thursday was 112.5 bcf/day (+5.9% y/y), according to BNEF. Â Lower-48 state gas demand on Thursday was 114.2 bcf/day (+15.7% y/y), according to BNEF. Â Estimated LNG net flows to US LNG export terminals on Thursday were 19.1 bcf/day (+6.6% w/w), according to BNEF.
Projections for lower US nat-gas production are supportive for prices. Â The EIA on January 13 cut its forecast for 2026 US dry nat-gas production to 107.4 bcf/day from last month's estimate of 109.11 bcf/day. Â US nat-gas production is currently near a record high, with active US nat-gas rigs recently posting a 2-year high.
As a bullish factor for gas prices, the Edison Electric Institute reported Wednesday that US (lower-48) electricity output in the week ended January 31 rose +21.4% y/y to 99,925 GWh (gigawatt hours), and US electricity output in the 52-week period ending January 31 rose +2.39% y/y to 4,303,577 GWh.
Thursday's weekly EIA report was supportive for nat-gas prices, as nat-gas inventories for the week ended January 30 fell by a record -360 bcf, a smaller draw than the market consensus of -378 bcf but well above the 5-year weekly average draw of -190 bcf. Â As of January 30, nat-gas inventories were up +2.8% y/y and were -1.1% below their 5-year seasonal average, signaling tighter nat-gas supplies. Â As of February 3, gas storage in Europe was 39% full, compared to the 5-year seasonal average of 56% 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 January 30 rose by +3 to 125 rigs, modestly below the 2.25-year high of 130 set on November 28. Â In the past year, the number of gas rigs has risen from the 4.5-year low of 94 rigs reported in September 2024.
Â
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.
/Oracle%20Corp_%20office%20logo-by%20Mesut%20Dogan%20via%20iStock.jpg)
/Tesla%20Inc%20tesla%20by-%20Iv-olga%20via%20Shutterstock.jpg)
/Microsoft%20sign%20at%20the%20headquarters%20by%20VDB%20Photos%20via%20Shutterstock.jpg)
