Nat-Gas Prices Rebound as US Weather Forecasts Cool

Core Insights - Natural gas prices in the US experienced a recovery, closing up by 2.38% after reaching a three-week low, driven by short-covering and colder weather forecasts that may increase heating demand [1] Production and Demand - The EIA has increased its forecast for US natural gas production in 2025 by 0.5% to 107.14 billion cubic feet per day (bcf/day), indicating a trend towards higher production levels [2] - US dry gas production was reported at 107.9 bcf/day, reflecting a year-over-year increase of 3.7%, while gas demand decreased to 69.7 bcf/day, down 6.0% year-over-year [3] Inventory and Supply - Natural gas inventories rose by 80 billion cubic feet (bcf) for the week ending October 10, which was below market expectations and the five-year average, indicating sufficient supply levels [5] - As of October 15, European gas storage was reported to be 83% full, compared to a five-year average of 91% for this time of year [5] Rig Count and Production Capacity - The number of active US natural gas drilling rigs increased by one to 121, nearing a two-year high, with a significant rise from a four-and-a-half-year low of 94 rigs reported in September 2024 [6] Electricity Output - US electricity output for the week ending October 11 rose by 5.1% year-over-year, which may support natural gas demand for power generation [4]