January Nymex natural gas (NGF25) on Monday closed up by +0.106 (+3.45%)
Jan nat-gas prices on Monday rallied to a 1-week high and closed moderately higher. Nat-gas prices rose Monday as weather forecasts showed below-normal temperatures at the end of this week for the eastern half of the US, which will boost heating demand for nat-gas.
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 Monday was 105 bcf/day (-0.9% y/y), according to BNEF. Lower-48 state gas demand Monday was 89.6 bcf/day (+10.9% y/y), according to BNEF. LNG net flows to US LNG export terminals Monday were 13.6 bcf/day (-2.7% 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 84% full as of December 3, below the 5-year seasonal average of 86% 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. More news from BarchartThe views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
