On Tuesday, October Nymex natural gas (NGV26) closed up 0.023 (+0.79%) amid expectations of above-average temperatures in the U.S., set to increase natural gas demand from electricity providers due to air conditioning usage. The Commodity Weather Group forecasts above-normal temperatures across the South and Southeast through September 29.
As of Tuesday, U.S. lower-48 dry gas production was reported at 111.7 billion cubic feet per day (bcf/day), a 1.9% year-over-year increase. Meanwhile, lower-48 gas demand reached 76.2 bcf/day, up 3.9% year-over-year. The Energy Information Administration projected U.S. natural gas storage levels will swell to 3,985 billion cubic feet by the end of October, the highest in a decade and 5% above the five-year average.
European natural gas prices recently surged to a 3.75-year high due to reduced supplies from the Middle East amid geopolitical tensions, contributing to bullish support in the U.S. market. However, forecasts of a “Super El Niño” could warm temperatures in the Northern Hemisphere this fall and winter, potentially reducing heating demand for natural gas.
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