February Nymex natural gas (NGG25) on Thursday closed down -0.185 (-5.28%).
Feb nat-gas prices Thursday finished sharply lower on forecasts for warmer US winter temperatures to continue, reducing heating demand for nat-gas. Forecaster Maxar Technologies said temperatures across much of the US will be above normal from December 26-30 before more normal temperatures return early next month.
Lower-48 state dry gas production Thursday was 105.0 bcf/day (-1.2% y/y), according to BNEF. Lower-48 state gas demand Thursday was 93 bcf/day (+9.6% y/y), according to BNEF. LNG net flows to US LNG export terminals Thursday were 14.3 bcf/day (-0.6% w/w), according to BNEF.
An increase in US electricity output is positive for nat-gas demand from utility providers. The Edison Electric Institute reported Thursday that total US (lower-48) electricity output in the week ended December 21 rose +1.87% y/y to 79,947 GWh (gigawatt hours), and US electricity output in the 52-week period ending December 21 rose +2.32% y/y to 4,177,082 GWh.
The consensus is that Friday's weekly EIA nat-gas inventories (pushed back a day due to Wednesday's Christmas holiday) will fall by -100 bcf for the week ended December 20, a smaller draw than the five-year average for this time of year of -127 bcf.
Last Thursday's weekly EIA report was slightly bullish for nat-gas prices since nat-gas inventories for the week ended December 13 fell -125 bcf, right on expectations but a much larger draw than the 5-year average draw for this time of year of -92 bcf. As of December 13, nat-gas inventories were up +1.3% y/y and were +3.8% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 76% full as of December 22, below the 5-year seasonal average of 79% 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 20 fell -1 rig 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).
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