Nat-Gas Prices Slip as Weekly EIA Inventories | U.S. Markets

April Nymex natural gasoline (NGJ25) on Thursday closed down -0.025 (-0.63%).

April nat-gas on Thursday settled reasonably decrease after weekly nat-gas inventories fell much less than anticipated.  The EIA reported Thursday that nat-gas inventories fell -261 bcf final week, a smaller draw than expectations of -271 bcf.  Additionally, forecasts for hotter US temperatures to scale back heating demand for nat-gas weighed on costs.  The Commodity Climate Group mentioned Thursday that above-normal climate is predicted throughout the southern half of the US for the March 4-8 period.  

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Nat-gas costs have been whipsawed up to now a number of periods by climate components and have consolidated beneath final Thursday’s 2-year high.  Nonetheless, nat-gas costs stay close to the highest of the February rally, which was pushed primarily by the stock drawdown attributable to the current cold climate.  As of February 21, EIA nat-gas inventories have been -11.5% beneath their 5-year average; the tightest provides have been in over 2-1/2 years.  

Decrease-48 state dry gasoline manufacturing Thursday was 107.4 bcf/day (+2.8 y/y), in accordance with BNEF.  Decrease-48 state gasoline demand Thursday was 83.5 bcf/day (+11% y/y), in accordance with BNEF.  LNG internet flows to US LNG export terminals Thursday have been 15.4 bcf/day (+0.6% w/w), in accordance with BNEF.

An increase in US electrical energy output is constructive for nat-gas demand from utility suppliers.  The Edison Electrical Institute reported Wednesday that complete US (lower-48) electrical energy output within the week ended February 22 rose +19.9% y/y to 90,673 GWh (gigawatt hours), and US electrical energy output within the 52-week period ending February 22 rose +3.1% y/y to 4,230,167 GWh.

In a bullish longer-term issue for nat-gas costs, President Trump lifted the Biden administration’s pause on approving gasoline export tasks in January, thus transferring into energetic consideration a backlog of about a dozen LNG export tasks.  Bloomberg reported that the Trump administration is close to approving its first LNG export project, a Commonwealth LNG export facility in Louisiana.  Elevated US capability for exporting LNG would enhance demand for US nat-gas and help nat-gas costs.

Thursday’s weekly EIA report was barely bearish for nat-gas costs since nat-gas inventories for the week ended February 21 fell -261 bcf, a smaller draw than expectations of -271 bcf however a bigger draw than the 5-year average draw for this time of 12 months of -141 bcf.  As of February 21, nat-gas inventories have been down -22.5% y/y and -11.5% beneath their 5-year seasonal average, signaling tight nat-gas provides.  In Europe, gasoline storage was 40% full as of February 25, versus the 5-year seasonal average of 51% full for this time of 12 months.

Baker Hughes reported final Friday that the quantity of energetic US nat-gas drilling rigs within the week ending February 21 fell -2 to 99 rigs, modestly above the 3-1/2 12 months low of 94 rigs posted on September 6, 2024.  Energetic rigs have fallen since posting a 5-1/4 12 months high of 166 rigs in Sep 2022, up from the pandemic-era report low of 68 rigs posted in July 2020 (knowledge since 1987). 

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