December Nymex natural gas (NGZ25) on Wednesday closed down -0.111 (-2.56%).
Dec nat-gas prices settled lower on Wednesday, due to ramped-up US nat-gas production and a mixed weather forecast. On Tuesday, US nat-gas production rose above 110 bcf/day, up 8.5% y/y and near a record high. Forecaster Atmospheric G2 said Wednesday that forecasts shifted colder for the East but shifted warmer for the central and western US for November 10-14. Also, forecasts trended warmer across the southern states for November 15-19, potentially reducing nat-gas heating demand.
US (lower-48) dry gas production on Wednesday was 109.7 bcf/day (+9.3% y/y), according to BNEF. Lower-48 state gas demand on Wednesday was 76.8 bcf/day (+3.5% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Wednesday were 16.8 bcf/day (+1.0% w/w), according to BNEF.
As a supportive factor for gas prices, the Edison Electric Institute reported 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.
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.
The consensus is for Thursday's weekly EIA nat-gas inventories to increase by +33 bcf for the week ended October 31, below the five-year average of +42 bcf for this time of year.
Last Thursday's weekly EIA report was neutral for nat-gas prices since nat-gas inventories for the week ended October 24 rose +74 bcf, right on the market consensus, but above the 5-year weekly average of +67 bcf. As of October 24, nat-gas inventories were up +0.5% y/y and were +4.6% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of November 3, 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 October 31 rose by +4 to a 2.25-year high of 125 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.
