February Nymex natural gas (NGG25) on Friday closed up by +0.288 (+7.78%).
Feb nat-gas prices Friday extended this week's rally to a 1-1/2 week high. Nat-gas rallied sharply Friday on the outlook for frigid US temperatures in the next two weeks, which will boost heating demand for nat-gas. NatGasWeather .com said Friday that an arctic blast of cold air will settle across most of the interior of US from January 19-24.
Lower-48 state dry gas production Friday was 101.7 bcf/day (-2.7% y/y), according to BNEF. Lower-48 state gas demand Friday was 114.2 bcf/day (+8.4% y/y), according to BNEF. LNG net flows to US LNG export terminals Friday were 15.1 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 Wednesday that total US (lower-48) electricity output in the week ended January 4 fell -2.73% y/y to 77,5180 GWh (gigawatt hours), although US electricity output in the 52-week period ending January 4 rose +2.37% y/y to 4,179,498 GWh.
Wednesday's weekly EIA report was slightly bearish for nat-gas prices since nat-gas inventories for the week ended January 3 fell -40 bcf, a smaller draw than expectations of -42, and much less than the 5-year average draw for this time of year of -93 bcf. As of January 3, nat-gas inventories were up +1.1% y/y and were +6.5% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 69% full as of January 7, below the 5-year seasonal average of 75% full for this time of year.
Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ending January 10 fell -3 to 100 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.
