January Nymex natural gas (NGF26) on Monday closed down -0.019 (-0.48%).
Jan nat-gas prices fell on Monday amid warmer US weather, which will dampen heating demand for nat gas. Commodity Weather is forecasting above-normal temperatures for much of the US, with a possibility of colder weather in the Midwest, East, and South later in December.
Higher US nat-gas production is also bearish for prices. The EIA on December 9 raised its forecast for 2025 US nat-gas production to 107.74 bcf/day from its November estimate of 107.70 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 Monday was 114.0 bcf/day (+9.3% y/y), according to BNEF. Lower-48 state gas demand on Monday was 92.9 bcf/day (-12.0% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Monday were 18.9 bcf/day (+4.7% w/w), according to BNEF.
As a supportive factor for gas prices, the Edison Electric Institute reported on December 10 that US (lower-48) electricity output in the week ended December 6 rose +2.3% y/y to 85,330 GWh (gigawatt hours), and US electricity output in the 52-week period ending December 6 rose +2.84% y/y to 4,291,665 GWh.
Last Thursday's weekly EIA report was slightly bearish for nat-gas prices, as nat-gas inventories for the week ended December 12 fell by -167 bcf, a smaller draw than the market consensus of -176 bcf but larger than the 5-year weekly average of -96 bcf. As of December 12, nat-gas inventories were down -1.2% y/y and were +0.9% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of December 17, gas storage in Europe was 68% full, compared to the 5-year seasonal average of 78% 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 December 19 remained unchanged at 127, just below the 2.25-year high of 130 set on November 28. In the past year, the number of gas rigs has risen from the 4.5-year low of 94 rigs reported in September 2024.
