December Nymex natural gas (NGZ25) on Friday closed down by -0.080 (-1.72%).
Dec nat-gas prices retreated on Friday due to a larger-than-expected build in weekly nat-gas storage. The EIA reported Friday that nat-gas inventories rose +45 bcf for the week ended November 7, higher than expectations of a +34 bcf build. Nat-gas prices extended their losses on Friday amid forecasts of warmer US temperatures, which could reduce nat-gas heating demand. Forecaster Atmospheric G2 said Friday that forecasts shifted warmer in the US, except in parts of the East, for November 19-23, and shifted even warmer across much of North America for November 24-28.
On Thursday, nat-gas prices rallied to an 8.25-month nearest futures high after colder-than-normal US temperatures boosted heating demand for nat-gas.
Higher US nat-gas production is a bearish factor for prices. On Wednesday, 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 Friday was 109.9 bcf/day (+7.1% y/y), according to BNEF. Lower-48 state gas demand on Friday was 80.0 bcf/day (-5.5% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 17.7 bcf/day (+5.9% w/w), according to BNEF.
As a supportive factor for gas prices, the Edison Electric Institute reported Thursday that US (lower-48) electricity output in the week ended November 8 rose +0.12% y/y to 73,383 GWh (gigawatt hours), and US electricity output in the 52-week period ending November 8 rose +2.84% y/y to 4,282,302 GWh.
Friday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended November 7 rose +45 bcf, above the market consensus of +34 bcf and the 5-year weekly average of +35 bcf. As of November 7, nat-gas inventories were down -0.3% y/y and were +4.5% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of November 12, gas storage in Europe was 82% full, compared to the 5-year seasonal average of 91% full for this time of year.
Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ending November 14 fell by -3 to 125 rigs, falling back from a 2.25-year high of 128 rigs on November 7. In the past year, the number of gas rigs has risen from the 4.5-year low of 94 rigs reported in September 2024.
