January Nymex natural gas (NGF26) on Monday closed up by +0.071 (+1.46%).
Jan nat-gas prices on Monday added to last Friday's sharp gains and posted a nearly 3-year nearest-futures high. Expectations of colder US temperatures, which will boost nat-gas heating demand, are lifting prices. Forecaster Atmospheric G2 on Monday said that forecasts shifted colder across the eastern two-thirds of the US for December 6-10, with temperatures trending even colder in the East for December 11-15.
Higher US nat-gas production is a bearish factor for prices. On November 12, the EIA raised its forecast for 2025 US nat-gas production by +1.0% to 107.67 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 111.8 bcf/day (+6.9% y/y), according to BNEF. Lower-48 state gas demand on Monday was 111.6 bcf/day (+2.7% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Monday were 18.4 bcf/day (-3.7% w/w), according to BNEF.
As a supportive factor for gas prices, the Edison Electric Institute reported November 19 that US (lower-48) electricity output in the week ended November 15 rose +5.33% y/y to 75,586 GWh (gigawatt hours), and US electricity output in the 52-week period ending November 15 rose +2.9% y/y to 4,286,124 GWh.
Last Wednesday's weekly EIA report was bullish for nat-gas prices, as nat-gas inventories for the week ended November 21 fell by -11 bcf, a larger draw than the market consensus of -9 bcf but less than the 5-year weekly average of a -25 bcf draw. As of November 21, nat-gas inventories were down -0.8% y/y and were +4.2% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of November 29, gas storage in Europe was 76% full, compared to the 5-year seasonal average of 86% full for this time of year.
Baker Hughes reported last Wednesday that the number of active US nat-gas drilling rigs in the week ending November 28 rose by +3 to 130 rigs, a 2.25-year high. 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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