October Nymex natural gas (NGV25) on Monday closed up +0.042 (+1.38%).
Oct nat-gas prices on Monday rallied to a 1-month high on supply concerns and forecasts for warmer late-summer US temperatures, which will boost nat-gas demand from electricity providers to power the increased air conditioning usage. Repairs have been extended for an extra week at a gas compressor station in Liberty County, Texas, on the Kinder Morgan pipeline, known as NGPL, which is reducing gas flows between Texas and Louisiana.
Nat-gas prices also found support Monday after forecaster Atmospheric G2 said forecasts shifted warmer over the eastern two-thirds of the US for September 13-17 and trended warmer across the southern and central US for September 18-22.
Higher US nat-gas production has recently been a 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 Monday was 108.1 bcf/day (+5.9% y/y), according to BNEF. Lower-48 state gas demand on Monday was 69.8 bcf/day (+2.5% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Monday were 15.2 bcf/day (-0.7% w/w), according to BNEF.
As a bearish factor for gas prices, the Edison Electric Institute reported last Thursday that US (lower-48) electricity output in the week ended August 30 fell -7.82% y/y to 85,603 GWh (gigawatt hours), although US electricity output in the 52-week period ending August 30 rose +2.77% y/y to 4,263,700 GWh.
Last Thursday’s weekly EIA report was neutral for nat-gas prices since nat-gas inventories for the week ended August 29 rose +55 bcf, right in line with the market consensus, though above the 5-year weekly average of +36 bcf. As of August 29, nat-gas inventories were down -2.2% y/y, but were +5.6% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of September 6, gas storage in Europe was 79% full, compared to the 5-year seasonal average of 86% full for this time of year.
