Nat-Gas Prices Climb on Expectations of Colder US Weather

Core Insights - Natural gas prices increased by 2.95% on December Nymex due to expectations of colder temperatures in the US, which are likely to boost heating demand [1] - The weekly EIA storage report indicated a neutral impact on prices, with inventories rising by 33 billion cubic feet (bcf), aligning with market expectations but falling short of the five-year average of 42 bcf [5] Production and Demand - US dry gas production reached 110.1 bcf/day, marking an 8.4% year-over-year increase, while gas demand was 79.5 bcf/day, up 1.5% year-over-year [2] - The Edison Electric Institute reported a slight increase in US electricity output, which rose by 0.05% year-over-year to 73,730 GWh for the week ending November 1 [3] Inventory and Storage - As of October 31, natural gas inventories were up 0.4% year-over-year and 4.3% above the five-year seasonal average, indicating sufficient supply levels [5] - European gas storage was reported to be 83% full, compared to the five-year average of 92% for this time of year [5] Drilling Activity - The number of active US natural gas drilling rigs increased to 125, the highest level in 2.25 years, reflecting a rise from a low of 94 rigs in September 2024 [6] - The EIA has raised its forecast for US natural gas production in 2025 by 0.5% to 107.14 bcf/day, indicating a trend towards higher production levels [4]