January Nymex natural gas (NGF26) on Monday closed down by -0.101 (-2.46%).
Jan nat-gas prices slid to a 7-week low on Monday and settled sharply lower. Nat-gas prices have sold off over the past week as US weather forecasts have turned warmer across much of the country, potentially reducing heating demand and prompting heavy liquidation in nat-gas futures. Forecaster Atmospheric G2 said Monday that forecasts shifted generally warmer across most of the US for December 25-29
Higher US nat-gas production is also bearish for prices. Last Tuesday, the EIA raised its forecast for 2025 US nat-gas production to 107.74 bcf/day from its November estimate of 107.70 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 113.1 bcf/day (+8.8% y/y), according to BNEF. Lower-48 state gas demand on Monday was 125.5 bcf/day (+39.0% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Monday were 16.8 bcf/day (-5.4% 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 December 6 rose +2.3% y/y to 85,330 GWh (gigawatt hours), and US electricity output in the 52-week period ending December 6 rose +2.84% y/y to 4,291,665 GWh.
Last Thursday's weekly EIA report was bullish for nat-gas prices, as nat-gas inventories for the week ended December 5 fell by -177 bcf, a larger draw than the market consensus of -170 bcf and than the 5-year weekly average of -89 bcf. As of December 5, nat-gas inventories were down unchanged y/y and were +2.8% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of December 13, gas storage in Europe was 70% full, compared to the 5-year seasonal average of 79% 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 December 12 fell by -2 to 127 rigs, just below the 2.25-year high of 130 rigs set on November 28. 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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