December Nymex natural gas (NGZ25) on Friday closed up +0.168 (+4.25%).
Dec nat-gas prices on Friday rallied sharply to a 7-month nearest-futures high on the outlook for colder US temperatures next month, which could potentially boost heating demand for nat-gas. Forecaster Vaisala said Friday that weather forecasts shifted cooler in the Midwest and East for November 10-14.
US (lower-48) dry gas production on Friday was 108.9 bcf/day (+6.6% y/y), according to BNEF. Lower-48 state gas demand on Friday was 79.0 bcf/day (+10.4% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 17.4 bcf/day (+4.7% 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 October 25 rose +1.9% y/y to 72,772 GWh (gigawatt hours), and US electricity output in the 52-week period ending October 25 rose +2.9% y/y to 4,282,176 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.
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 October 29, 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 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.
