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On October 12, 2023, Nymex natural gas futures closed down 5.19%, a decline of -0.161, influenced by a larger-than-expected inventory build reported by the EIA. Natural gas inventories rose by 90 billion cubic feet (bcf) for the week ending September 12, surpassing predictions of 81 bcf and the five-year average of 74 bcf.
The decline in natural gas prices was further exacerbated by cooler weather forecasts for late September, which are expected to reduce demand from electricity providers. As of September 12, U.S. lower-48 dry gas production was recorded at 107.2 bcf/day, a 5.7% increase year-over-year, with a recent forecast from the EIA predicting production to reach 106.63 bcf/day by 2025.
In terms of industry activity, the number of active U.S. natural gas drilling rigs remained unchanged at 118, slightly below the two-year high of 124 rigs reached in August. Current gas storage in Europe is at 81% capacity, compared to the five-year average of 87%.
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