November Nymex natural gas (NGX25) on Monday closed up by +0.012 (+0.39%).

Nov nat-gas prices rebounded from a 3-week low on Monday and settled slightly higher.   Updated weather forecasts that call for temperatures to turn colder at the end of this month sparked short covering in nat gas futures.  Atmospheric G2 expects temperatures across the eastern and central US to turn colder the last week of October.

Nat-gas price initially moved lower Monday after previous forecasts called for above-normal temperatures to linger in the US for the rest of this month, which should curb heating demand and is bearish for nat-gas prices.  Forecaster Vaisala said that the outlook for October 18-22 calls for above-normal temperatures across the entire eastern half of the US, and that widespread warmth is seen across the lower 48 states for October 23-27.  

Higher US nat-gas production is a bearish factor for prices.  Last Tuesday, the EIA raised its forecast for 2025 US nat-gas production by +0.5% to 107.14 bcf/day from September's estimate of 106.60 bcf/day.  US nat-gas production is currently near a record high, with active US nat-gas rigs recently posting a 2-year high.

US (lower-48) dry gas production on Monday was 106.3  bcf/day (+3.8% y/y), according to BNEF.  Lower-48 state gas demand on Monday was 64.6 bcf/day (-1.4% y/y), according to BNEF.  Estimated LNG net flows to US LNG export terminals on Monday were 16.0 bcf/day (+2.3% w/w), according to BNEF.

As a supportive factor for gas prices, the Edison Electric Institute reported last Wednesday that US (lower-48) electricity output in the week ended October 4 rose +2.91% y/y to 80,972 GWh (gigawatt hours), and US electricity output in the 52-week period ending October 4 rose +2.89% y/y to 4,274,208 GWh.

Last Thursday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended October 3 rose +80 bcf, above the market consensus of +77 bcf but below the 5-year weekly average of +94 bcf.  As of October 3, nat-gas inventories were up +0.3% y/y, and were +4.5% above their 5-year seasonal average, signaling adequate nat-gas supplies.  As of October 11, gas storage in Europe was 83% full, compared to the 5-year seasonal average of 91% 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 October 10 rose by +2 to 120 rigs, slightly below the 2-year high of 124 rigs posted on August 1.  In the past year, the number of gas rigs has risen from the 4.5-year low of 94 rigs reported in September 2024.