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Nat-Gas Prices Gain as Longer-Term US Forecasts Turn Colder![]() February Nymex natural gas (NGG25) on Friday closed up by +0.082 (+2.08%). Feb nat-gas prices Friday erased early losses and moved moderately higher after midday weather reports showed long-term US forecasts cooling for the center part of the country, which will increase heating demand for nat-gas. Forecaster Maxar Technologies said Friday that US forecasts shifted colder for the western and central parts of the country from February 3-7. Last Monday, nat-gas prices soared to a 1-year nearest-futures high as an arctic blast sent temperatures plunging across the US, leading to a surge in heating demand and reducing inventories. Lower-48 state dry gas production Friday was 103.3 bcf/day (-0.5% y/y), according to BNEF. Lower-48 state gas demand Friday was 121.3 bcf/day (+33.3% y/y), according to BNEF. LNG net flows to US LNG export terminals Friday were 13.3 bcf/day (-12% w/w), according to BNEF. A decrease in US electricity output is negative for nat-gas demand from utility providers. The Edison Electric Institute reported Thursday that total US (lower-48) electricity output in the week ended January 18 fell -7.35% y/y to 87,343 GWh (gigawatt hours), although US electricity output in the 52-week period ending January 18 rose +1.86% y/y to 4,181,320 GWh. Thursday's weekly EIA report was slightly bearish for nat-gas prices since nat-gas inventories for the week ended January 17 fell -223 bcf, a smaller draw than expectations of -247 but a much bigger draw than the 5-year average draw for this time of year of -167 bcf. As of January 17, nat-gas inventories were up +1.3% y/y and were +0.7% above their 5-year seasonal average, signaling ample nat-gas supplies. In Europe, gas storage was 59% full as of January 20, below the 5-year seasonal average of 67% 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 24 rose +1 to 99 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. |
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