The Outlook for Warmer US Temps Lifts Nat-Gas Prices

Core Insights - Natural gas prices in October increased by 0.87%, closing at a higher level but still below the one-month high reached on Monday, influenced by warmer temperature forecasts in the US [1][2] - The US Energy Information Administration (EIA) has raised its 2025 natural gas production forecast by 0.2%, indicating a continued increase in production levels [3] - Current US natural gas production is near record highs, with active drilling rigs at a two-year peak [3][7] Production and Demand - US dry gas production reached 107.0 billion cubic feet per day (bcf/day), marking a 4.6% year-over-year increase, while gas demand decreased by 1.0% year-over-year to 70.4 bcf/day [4] - Estimated LNG net flows to US export terminals were 14.6 bcf/day, reflecting a 5.5% week-over-week decline [4] Inventory and Supply - Natural gas inventories rose by 55 bcf for the week ending August 29, aligning with market expectations but above the five-year average, indicating sufficient supply levels [6] - As of September 7, European gas storage was 79% full, compared to the five-year seasonal average of 86% [6] Electricity Output - US electricity output for the week ending August 30 fell by 7.82% year-over-year, although the annual output for the previous 52 weeks increased by 2.77% [5]