January Nymex natural gas (NGF26) on Wednesday closed up by +0.077 (+1.72%).
Dec nat-gas prices moved higher on Wednesday after weekly nat-gas storage fell more than expected. The EIA reported that nat-gas inventories fell -11 bcf in the week ended November 21, a larger draw than expectations of -9 bcf. Nat-gas prices extended their gains on Wednesday due to colder US weather forecasts, potentially boosting nat-gas heating demand. Forecaster Atmospheric G2 said Wednesday that forecasts shifted colder in the eastern and southern US for December 1-5, and turned colder in the eastern and northern US for December 6-10.
Higher US nat-gas production is a bearish factor for prices. On November 12, 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 a record 113.1 bcf/day (+8.3% y/y), according to BNEF. Lower-48 state gas demand on Wednesday was 89.8 bcf/day (-0.7% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Wednesday were 18.4 bcf/day (+3.5% 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 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.
Wednesday's weekly EIA report was bullish for nat-gas prices, as nat-gas inventories for the week ended November 21 fell by -11 bcf, a larger draw than the market consensus of -9 bcf but less than the 5-year weekly average of a -25 bcf draw. As of November 21, nat-gas inventories were down -0.8% y/y and were +4.2% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of November 24, gas storage in Europe was 78% full, compared to the 5-year seasonal average of 88% full for this time of year.
Baker Hughes reported Wednesday that the number of active US nat-gas drilling rigs in the week ending November 28 rose by +3 to 130 rigs, a 2.25-year high. In the past year, the number of gas rigs has risen from the 4.5-year low of 94 rigs reported in September 2024.
