January Nymex natural gas (NGF26) on Thursday closed up by +0.068 (+1.36%).
Jan nat-gas prices recovered from early losses and added to this week's gains on Thursday, rising to a nearly 3-year nearest-futures high. Weather forecasts for below-normal US temperatures that will boost nat-gas heating demand have fueled a sharp rally in prices over the past week. Forecaster Atmospheric G2 said Thursday that the eastern half of the US is forecast to be colder than normal for December 9-13.
Nat-gas prices dipped briefly on Thursday after a smaller-than-expected draw in weekly nat-gas supplies. The EIA reported that nat-gas inventories fell by -12 bcf for the week ended November 28, a smaller draw than expectations of -18 bcf.
US (lower-48) dry gas production on Thursday was 111.5 bcf/day (+6.3% y/y), according to BNEF. Lower-48 state gas demand on Thursday was 118.1 bcf/day (+12.2% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Thursday were 17.7 bcf/day (-4.5% w/w), according to BNEF.
As a supportive factor for gas prices, the Edison Electric Institute reported on Wednesday that US (lower-48) electricity output in the week ended November 29 rose +2.11% y/y to 76,459 GWh (gigawatt hours), and US electricity output in the 52-week period ending November 29 rose +2.99% y/y to 4,289,746 GWh.
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.
Thursday's weekly EIA report was bearish for nat-gas prices, as nat-gas inventories for the week ended November 28 fell by -12 bcf, a smaller draw than the market consensus of -18 bcf and than the 5-year weekly average of a -43 bcf draw. As of November 28, nat-gas inventories were down -0.4% y/y and were +5.1% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of December 2, gas storage in Europe was 74% full, compared to the 5-year seasonal average of 85% full for this time of year.
Baker Hughes reported last 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.
