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. Â 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. Â 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. Â 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. Â Lower-48 state gas demand on Monday was 92.9 bcf/day (-12.0% y/y), according to BNEF. Â 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. Â 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. Â 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. Â In the past year, the number of gas rigs has risen from the 4.5-year low of 94 rigs reported in September 2024.
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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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