October Nymex natural gas (NGV24) on Thursday closed up by +0.087 (+3.83%).

Oct nat-gas prices Thursday jumped to a 3-week high on a lower-than-expected build in weekly EIA nat-gas supplies.  The EIA reported Thursday that weekly nat-gas inventories rose +40 bcf, below expectations of +48 bcf.  

Nat-gas prices also saw support from forecasts for warmer US weather that will boost nat-gas demand from electricity providers to run air conditioning.  NatGasWeather said Thursday that warmer-than-normal temperatures are expected across most of the US into the end of this month.  

Lower-48 state dry gas production Thursday was 99.5 bcf/day (-1.1% y/y), according to BNEF.  Lower-48 state gas demand Thursday was 70.5 bcf/day (-2.5% y/y), according to BNEF.  LNG net flows to US LNG export terminals Thursday were 11.9 bcf/day (-10.9% 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 Wednesday that total US electricity output in the week ended September 7 fell -8.05% y/y to 82,941 GWh (gigawatt hours), although US electricity output in the 52-week period ending September 7 rose +1.46% y/y to 4,141,562 GWh.

Thursday's weekly EIA report was bullish for nat-gas prices since nat-gas inventories for the week ended September 6 rose +40 bcf, below expectations of +48 and well below the 5-year average build for this time of year of +67 bcf.  As of September 6, nat-gas inventories were up +5.7% y/y and were +9.6% above their 5-year seasonal average, signaling ample nat-gas supplies.  In Europe, gas storage was 93% full as of September 9, above the 5-year seasonal average of 87% full for this time of year.

Baker Hughes reported last Friday that the number of active US nat-gas drilling rigs in the week ending September 6 fell by -1 rig to a 3-1/3 year low of 94 rigs.  Active rigs have fallen back since posting a 5-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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