Nat-Gas Prices Rally on Cooler US Weather Forecasts

Core Insights - Natural gas prices in the US experienced a significant increase of +4.18% on November Nymex, recovering most of the losses from the previous week due to cooler weather forecasts that are expected to increase heating demand in northern regions [1] Production and Demand - US dry gas production reached 108.2 billion cubic feet per day (bcf/day), marking a year-over-year increase of +4.2% [2] - Gas demand in the lower-48 states was reported at 75.1 bcf/day, also reflecting a +4.2% year-over-year increase [2] - Estimated LNG net flows to US export terminals were 16.6 bcf/day, showing a weekly increase of +1.5% [2] Market Dynamics - The increase in US natural gas production is viewed as a bearish factor for prices, with the EIA raising its 2025 production forecast by +0.5% to 107.14 bcf/day [3] - Active US natural gas rigs remained stable at 121, just below the recent high of 124 rigs, indicating a recovery from a low of 94 rigs in September 2024 [6] Inventory and Supply - The EIA reported a rise in natural gas inventories by +87 billion cubic feet (bcf) for the week ending October 17, surpassing market expectations and the 5-year average [5] - As of October 21, European gas storage was 83% full, compared to a 5-year seasonal average of 92% [5] Electricity Output - The Edison Electric Institute reported a +4.0% year-over-year increase in US electricity output for the week ending October 18, totaling 73,756 GWh [4] - Over the past 52 weeks, electricity output rose by +2.89% year-over-year to 4,280,821 GWh [4]