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.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.