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January Nymex natural gas (NGF25) on Friday closed sharply lower by -0.175 (-5.07%)
Jan nat-gas prices tumbled Friday on forecasts for warming US weather that will curb heating demand for nat-gas. On Friday, forecaster Maxar Technologies said forecasts moved warmer for most of the US from December 23-27, with the Northeast seeing above-normal temperatures about halfway through the period.
Lower-48 state dry gas production Friday was 105.5 bcf/day (-0.4% y/y), according to BNEF. Lower-48 state gas demand Friday was 106.3 bcf/day (+5.6% y/y), according to BNEF. LNG net flows to US LNG export terminals Friday were 14.3 bcf/day (+6.3% 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 Wednesday that total US (lower-48) electricity output in the week ended December 7 rose +10.87% y/y to 83,412 GWh (gigawatt hours), and US electricity output in the 52-week period ending December 7 rose +1.96% y/y to 4,173,295 GWh.
Thursday’s weekly EIA report was bullish for nat-gas prices since nat-gas inventories for the week ended December 6 fell -190 bcf versus expectations of -168 bcf and a much larger draw than the 5-year average draw for this time of year of -71 bcf. As of December 6, nat-gas inventories were up +2.3% y/y and were +4.6% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 81% full as of December 10, below the 5-year seasonal average of 83% full for this time of year.
Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ending December 13 rose +1 rig to 103 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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