December Nymex natural gas (NGZ25) on Monday closed down by -0.226 (-4.95%).
Dec nat-gas prices fell sharply on Monday due to warmer-than-normal weather forecasts for Nov 22-26 for the eastern half of the US. Nat-gas prices were also pressured by high US gas production and high US nat-gas inventories.
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 Monday was 110.0 bcf/day (+7.1% y/y), according to BNEF. Lower-48 state gas demand on Monday was 84.7 bcf/day (-5.5% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Monday were 17.6 bcf/day (-1.8% w/w), according to BNEF.
As a supportive factor for gas prices, the Edison Electric Institute reported last Thursday that US (lower-48) electricity output in the week ended November 8 rose +0.12% y/y to 73,383 GWh (gigawatt hours), and US electricity output in the 52-week period ending November 8 rose +2.84% y/y to 4,282,302 GWh.
Last Friday's weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended November 7 rose +45 bcf, above the market consensus of +34 bcf and the 5-year weekly average of +35 bcf. As of November 7, nat-gas inventories were down -0.3% y/y and were +4.5% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of November 12, gas storage in Europe was 82% full, compared to the 5-year seasonal average of 91% 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.
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.
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