December Nymex natural gas (NGZ25) on Wednesday closed down by -0.032 (-0.70%).
Dec nat-gas prices fell from an 8-month nearest-futures high on Wednesday and turned lower on a mixed US weather forecast, which could potentially reduce heating demand for nat-gas. Forecaster Atmospheric G2 said Wednesday that forecasts shifted warmer in the central US in the November 22-26 period but turned colder later in the period.
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 Wednesday was 110.8 bcf/day (+10.4% y/y), according to BNEF. Lower-48 state gas demand on Wednesday was 86.9 bcf/day (+6.1% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Wednesday were 17.8 bcf/day (+5.1% 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 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.
The consensus is that Thursday's EIA nat-gas inventories will increase by +34 bcf for the week ended November 7, close to the five-year average of +35 bcf.
Last Thursday's weekly EIA report was neutral for nat-gas prices since nat-gas inventories for the week ended October 31 rose +33 bcf, right on the market consensus, but below the 5-year weekly average of +42 bcf. As of October 31, nat-gas inventories were up +0.4% y/y and were +4.3% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of November 10, 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 last Friday that the number of active US nat-gas drilling rigs in the week ending November 7 rose by +3 to a 2.25-year high of 128 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.
