Nat-Gas Prices Jump as US Weather Forecasts Trend Hotter

Core Insights - Natural gas prices in the US experienced a significant increase due to forecasts predicting hotter weather, which is expected to raise demand from electricity providers for air conditioning [1] - The US Energy Information Administration (EIA) has raised its forecast for natural gas production in 2025, indicating a slight increase in supply [2] - Despite high production levels, natural gas inventories have risen above market expectations, suggesting adequate supply in the market [3] Group 1: Natural Gas Prices and Demand - October natural gas prices closed up by 3.47% on Monday, reflecting a rally driven by warmer weather forecasts [1] - Forecasts indicate above-normal temperatures across most of the US from September 25-29, which is likely to increase natural gas demand for electricity generation [1] Group 2: Production and Supply Dynamics - The EIA has increased its 2025 natural gas production forecast by 0.2% to 106.63 billion cubic feet per day (bcf/day) [2] - Current US natural gas production is near record highs, with active drilling rigs at a two-year peak [2][4] - US dry gas production was reported at 108.7 bcf/day, a 7.0% year-over-year increase, while demand was at 71.8 bcf/day, up 2.0% year-over-year [2] Group 3: Inventory Levels and Market Sentiment - Natural gas inventories rose by 71 billion cubic feet (bcf) for the week ending September 5, exceeding market expectations and the five-year average [3] - As of September 5, natural gas inventories were down 1.3% year-over-year but 6.0% above the five-year seasonal average, indicating sufficient supply [3] - European gas storage was reported to be 80% full, compared to the five-year average of 87% for this time of year [3]