Nat-Gas Prices Fall on Warm US Weather Forecasts and Ample Inventories

Core Insights - December Nymex natural gas prices fell sharply by 4.95% due to warmer-than-normal weather forecasts and high US gas production and inventories [1] Production and Inventory - The EIA raised its forecast for 2025 US natural gas production by 1.0% to 107.67 billion cubic feet per day (bcf/day) from the previous estimate of 106.60 bcf/day, indicating a trend of increasing production [2] - US dry gas production reached 110.0 bcf/day, reflecting a year-over-year increase of 7.1%, while gas demand decreased to 84.7 bcf/day, down 5.5% year-over-year [3] - Natural gas inventories rose by 45 billion cubic feet (bcf) for the week ending November 7, exceeding market expectations and the 5-year average, indicating sufficient supply levels [5] Market Dynamics - The number of active US natural gas drilling rigs decreased by 3 to 125 rigs, down from a recent high of 128 rigs, although this number has increased from a low of 94 rigs reported in September 2024 [6] - Electricity output in the US rose by 0.12% year-over-year to 73,383 GWh for the week ending November 8, contributing to potential support for gas prices [4]