December Nymex natural gas (NGZ25) on Friday closed up by +0.111 (+2.48%).
Dec nat-gas prices climbed to a 1-week high on Friday and settled sharply higher on forecasts of colder US weather early next month, potentially boosting nat-gas heating demand. Forecaster Atmospheric G2 said Friday that temperatures shifted colder in the West and Northeast for November 26-30, and moved colder across the middle of the country for December 1-5.
Nat-gas prices on Friday also had some positive carryover from Thursday, following a contraction in nat-gas storage when the EIA reported that nat-gas inventories fell -14 bcf for the week ended November 14, more than expectations of -12 bcf and a bigger decline than the five-year average for a +12 bcf increase for the same period.
Higher US nat-gas production is 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 Friday was 111.1 bcf/day (+7.9% y/y), according to BNEF. Lower-48 state gas demand on Friday was 82.8 bcf/day (-9.2% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 17.7 bcf/day (-1.5% 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.
Thursday's weekly EIA report was bullish for nat-gas prices, as nat-gas inventories for the week ended November 14 fell by -14 bcf, a larger draw than the market consensus of -12 bcf and well below the 5-year weekly average of a +12 bcf increase. As of November 14, nat-gas inventories were down -0.6% y/y and were +3.8% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of November 18, gas storage in Europe was 81% full, compared to the 5-year seasonal average of 90% 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 21 rose by +2 to 127 rigs, just below the 2.25-year high of 128 rigs from 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.
