Nat-Gas Prices Jump on Colder US Weather Forecasts

Core Viewpoint - Natural gas prices in the US have experienced a significant increase due to colder weather forecasts, which are expected to boost heating demand [2]. Group 1: Price Movements - December Nymex natural gas closed up by +0.179 (+4.10%) on Wednesday [1]. - The rally in natural gas prices is attributed to colder weather forecasts across the eastern US, which could increase heating demand [2]. Group 2: Supply and Demand Dynamics - The outlook for US natural gas storage is expected to decline, with a consensus that the EIA inventory report will show a decrease of -11 billion cubic feet (bcf) for the week ended November 14, contrasting with a five-year average increase of +12 bcf for the same period [3]. - US dry gas production was reported at 109.4 bcf/day, reflecting a year-over-year increase of +7.5% [5]. - Lower-48 state gas demand was recorded at 86.2 bcf/day, showing a year-over-year increase of +10.5% [5]. Group 3: Production Forecasts - The EIA has raised its forecast for US natural gas production in 2025 by +1.0% to 107.67 bcf/day from a previous estimate of 106.60 bcf/day [4]. - Active US natural gas rigs have recently reached a two-year high, indicating robust production levels [4]. Group 4: Electricity Output - The Edison Electric Institute reported a +5.33% year-over-year increase in US electricity output for the week ended November 15, totaling 75,586 GWh [6]. - Over the 52-week period ending November 15, US electricity output rose +2.9% year-over-year to 4,286,124 GWh [6]. Group 5: Inventory Levels - The previous EIA report indicated a bearish trend for natural gas prices, with inventories rising by +45 bcf for the week ended November 7, exceeding market expectations [7]. - As of November 7, natural gas inventories were down -0.3% year-over-year and +4.5% above the five-year seasonal average, suggesting adequate supply levels [7]. - European gas storage was reported to be 82% full as of November 17, compared to a five-year seasonal average of 90% [7].