December Nymex natural gas (NGZ25) on Wednesday closed up by +0.179 (+4.10%).
Dec nat-gas prices rallied sharply on Wednesday as late-November and early December US weather forecasts shifted colder across the eastern half of the country, which could boost nat-gas heating demand. Forecaster Atmospheric G2 said Wednesday that temperatures shifted colder in the eastern two-thirds of the US later in the November 24-28 period, and forecasts shifted colder in the middle third of the country for November 29-December 3.
The outlook for weekly US nat-gas storage to decline is also supportive for gas prices. The consensus is that Thursday's EIA inventory report will show that nat-gas inventories fell -11 bcf for the week ended November 14, versus the five-year average for a +12 bcf increase for the same period.
Higher US nat-gas production is also a bearish factor for prices. Last 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 Wednesday was 109.4 bcf/day (+7.5% y/y), according to BNEF. Lower-48 state gas demand on Wednesday was 86.2 bcf/day (+10.5% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Wednesday were 17.6 bcf/day (-1.7% 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 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 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 17, gas storage in Europe was 82% full, compared to the 5-year seasonal average of 90% 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 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.
