October Nymex natural gas (NGV25) on Friday closed down -0.069 (-2.38%).
Oct nat-gas retreated on Friday due to ample storage and warming forecasts for October, which lowers the chances of early-season heating demand for nat-gas. As of September 19, nat-gas inventories were +6.1% above their 5-year seasonal average, signaling abundant nat-gas supplies.
Warmer-than-normal U.S. temperatures for early autumn are negative for nat-gas prices as the warm weather will curb heating demand for nat -gas. Forecaster Atmospheric G2 said Friday that forecasts shifted warmer over the middle of the U.S. for October 1-5, and forecasts remained above-normal across most of the U.S. for October 6-10.
Higher U.S. nat-gas production has recently been a bearish factor for prices. Earlier this month, the EIA raised its forecast for 2025 U.S. nat-gas production by +0.2% to 106.63 bcf/day from August's estimate of 106.40 bcf/day. U.S. nat-gas production is currently near a record high, with active U.S. nat-gas rigs recently posting a 2-year high.
U.S. (lower-48) dry gas production on Friday was 107.7 bcf/day (+6.8% y/y), according to BNEF. Lower-48 state gas demand on Friday was 70.4 bcf/day (-0.9% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 15.8 bcf/day (+1.3% w/w), according to BNEF.
As a supportive factor for gas prices, the Edison Electric Institute reported Wednesday that US (lower-48) electricity output in the week ended September 20 rose +2.3% y/y to 85,663 GWh (gigawatt hours), and US electricity output in the 52-week period ending September 20 rose +2.85% y/y to 4,267,164 GWh.
Thursday's weekly EIA report was neutral for nat-gas prices since nat-gas inventories for the week ended September 19 rose +75 bcf, just above the market consensus of +74 bcf but below the 5-year weekly average of +76 bcf. As of September 19, nat-gas inventories were up +0.5% y/y, and were +6.1% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of September 23, gas storage in Europe was 82% 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 ending September 26 fell by -1 to 117 rigs, slightly below the 2-year high of 124 rigs posted on August 1. In the past year, the number of gas rigs has risen from the 4.5-year low of 94 rigs reported in September 2024.
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