December Nymex natural gas (NGZ25) on Thursday closed down by -0.076 (-1.67%).
Dec nat-gas prices gave up an early advance on Thursday and settled lower as US weather forecasts turned warmer, which could dampen heating demand for nat-gas. Forecaster Atmospheric G2 said Thursday that temperatures shifted warmer over the northern US for November 25-29, and turned warmer across the middle of the country for November 30-December 4.
Nat-gas prices initially moved higher Thursday after weekly nat-gas storage declined more than expected. EIA 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 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 Thursday was 110.1 bcf/day (+7.6% y/y), according to BNEF. Lower-48 state gas demand on Thursday was 84.6 bcf/day (+1.2y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Thursday were 17.4 bcf/day (-2.2% 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 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.
