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On Friday, October Nymex natural gas prices closed at $2.94, down $0.051 (-1.74%), marking a three-week low. This decline followed a report by the EIA indicating a rise in US natural gas inventories by 90 billion cubic feet (bcf) for the week ending September 12, surpassing expectations of 81 bcf and the five-year average of 74 bcf. Current inventories are now 6.3% above the five-year seasonal average, suggesting an oversupply.
US dry gas production reached 107.6 bcf/day, a 6.1% year-over-year increase, while demand decreased to 73.1 bcf/day (-4.6% y/y). Additionally, LNG net flows to export terminals were estimated at 15.3 bcf/day (+0.2% week-over-week). The number of active US natural gas drilling rigs remained at 118, near a two-year high of 124 rigs from August 1.
Atmospheric G2 forecasts indicate cooler weather across most of the US from September 24-28, further reducing natural gas demand for electricity used in air conditioning.
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