Nat-Gas Prices Climb on Supply Concerns and Forecasts for Warmer US Temps

Core Insights - Natural gas prices in October closed at a one-month high due to supply concerns and warmer temperature forecasts in the US, which are expected to increase demand from electricity providers for air conditioning [1][2] - US natural gas production is at a near-record high, with the EIA raising its production forecasts for 2025 and 2026, indicating a bearish trend for prices [3] - The US lower-48 dry gas production was reported at 108.1 bcf/day, showing a year-over-year increase of 5.9%, while gas demand was at 69.8 bcf/day, up 2.5% year-over-year [4] Supply and Demand Dynamics - Repairs at a gas compressor station in Texas are impacting gas flows between Texas and Louisiana, contributing to supply concerns [1] - The Edison Electric Institute reported a year-over-year decrease in US electricity output, which may influence natural gas demand negatively [5] - Natural gas inventories increased by 55 bcf, aligning with market expectations but remaining below the year-over-year levels, indicating adequate supply [6] Market Trends - The recent forecasts from Atmospheric G2 indicate warmer temperatures across the eastern and southern US, which could further boost natural gas demand [2] - Estimated LNG net flows to US export terminals decreased slightly, indicating potential fluctuations in export demand [4] - European gas storage levels are currently at 79% full, which is below the five-year seasonal average of 86%, suggesting varying supply conditions in the global market [6]