October Nymex natural gas (NGV25) on Wednesday closed up +0.055 (+1.83%).
Oct nat-gas prices on Wednesday added to Tuesday’s gains and posted a 4-week high on forecasts for warmer temperatures in the northern half of the US, which will boost nat-gas demand from electricity providers to power air conditioning. On Wednesday, forecaster Atmospheric G2 said forecasts shifted warmer for the middle of the country for September 8-12, and temperatures also trended warmer over the northern half of the country for September 13-17.
Natural gas prices have been under pressure over the past 2.5 months, dropping to a 9.5-month low in nearest-futures prices last Monday, as forecasts for cooler late-summer weather emerged and as US gas production remains near a record high.
Ramped-up US nat-gas production is another bearish factor for prices. On August 12, the EIA raised its forecast for 2025 US nat-gas production by +0.5% to 106.44 bcf/day from July’s estimate of 105.9 bcf/day. The EIA raised its forecast for 2026 US nat-gas production by +0.7% to 106.09 from July’s 105.4 bcf/day forecast. US nat-gas production is currently near a record high, with active US nat-gas rigs recently posting a 2-year high.
US (lower-48) dry gas production on Wednesday was 105.7 bcf/day (+3.3% y/y), according to BNEF. Lower-48 state gas demand on Wednesday was 74.0 bcf/day (+2.3% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Wednesday were 15.0 bcf/day (-0.5% w/w), according to BNEF.
As a supportive factor for gas prices, the Edison Electric Institute reported last Wednesday that US (lower-48) electricity output in the week ended August 23 rose +7.7% y/y to 95,130 GWh (gigawatt hours), and US electricity output in the 52-week period ending August 23 rose +3.1% y/y to 4,270,960 GWh.
The consensus is that Thursday’s weekly EIA nat-gas inventories will climb by +75 bcf for the week ended August 29, well above the five-year average for this time of year of +36 bcf.
Last Thursday’s weekly EIA report was bullish for nat-gas prices since nat-gas inventories for the week ended August 22 rose +18 bcf, below the consensus of +27 bcf and well below the 5-year weekly average of +38 bcf. As of August 22, nat-gas inventories were down -3.5% y/y, but were +5.0% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of September 1, gas storage in Europe was 78% full, compared to the 5-year seasonal average of 85% full for this time of year.
