December Nymex natural gas (NGZ25) on Monday closed up +0.023 (+0.53%).
Dec nat-gas prices rallied to an 8-month nearest-futures high on Monday as forecasts for colder US temperatures could boost heating demand for nat-gas. Forecaster G2 said Monday that forecasts shifted colder across most of the US, except for the Southeast, for November 15-19. Also, forecasts trended colder over the middle of the country for November 20-24.
However, nat-gas prices fell from their highest level on Monday amid ramped-up US nat-gas production, which jumped more than 12% to a record high of 111.0 bcf/day. Last Friday's weekly report from Baker Hughes showed active US nat-gas rigs increased to a 2.25-year high.
Higher US nat-gas production is a bearish factor for prices. On October 7, 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 111.0 bcf/day (+12.1% y/y), according to BNEF. Lower-48 state gas demand on Monday was 94.7 bcf/day (+30.0% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Monday were 18.0 bcf/day (+5.8% 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 November 1 rose +0.05% y/y to 73,730 GWh (gigawatt hours), and US electricity output in the 52-week period ending November 1 rose +2.89% y/y to 4,282,216 GWh.
Last Thursday's weekly EIA report was neutral for nat-gas prices since nat-gas inventories for the week ended October 31 rose +33 bcf, right on the market consensus, but below the 5-year weekly average of +42 bcf. As of October 31, nat-gas inventories were up +0.4% y/y and were +4.3% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of November 5, gas storage in Europe was 83% full, compared to the 5-year seasonal average of 92% 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 November 7 rose by +3 to a 2.25-year high of 128 rigs. In the past year, the number of gas rigs has risen from the 4.5-year low of 94 rigs reported in September 2024.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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