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June Nymex natural gas (NGM25) on Thursday closed down by -0.115 (-3.41%).
June nat-gas prices tumbled on Thursday due to a larger-than-expected build-in of weekly inventories. Weekly EIA mat-gas inventories on Thursday rose by +120 bcf for the week ended May 16, above expectations of +119 bcf and well above the five-year average for this time of year of +87 bcf.
Nat-gas prices were also under pressure Thursday from forecasts for cooler than normal spring temperatures in the US, which will reduce nat-gas demand from electricity providers to run air conditioning. WSI Trader said Thursday that forecasts shifted cooler for a large portion of the eastern and central US for May 27-31.
Lower-48 state dry gas production Thursday was 106.4 bcf/day (+4.6% y/y), according to BNEF. Lower-48 state gas demand Thursday was 66.8 bcf/day (-4.5% y/y), according to BNEF. LNG net flows to US LNG export terminals Thursday were 14.5 bcf/day (+3.4% w/w), according to BNEF.
An increase in US electricity output is positive for nat-gas demand from utility providers. The Edison Electric Institute reported Wednesday that total US (lower-48) electricity output in the week ended May 17 rose +2.5% y/y to 75,855 GWh (gigawatt hours), and US electricity output in the 52-week period ending May 17 rose +3.67% y/y to 4,253,433 GWh.
Thursday’s weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended May 16 rose +120 bcf, above expectations of +119 bcf and well above the 5-year average build for this time of year of +87 bcf. As of May 16, nat-gas inventories were down -12.7% y/y and +3.9% above their 5-year seasonal average, signaling adequate nat-gas supplies. In Europe, gas storage was 45% full as of May 20, versus the 5-year seasonal average of 56% 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 May 16 fell -1 to 100 rigs, modestly above the 4-year low of 94 rigs posted on September 6, 2024. Active rigs have fallen since posting a 5-1/2 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).
Source: msn
