Nat-Gas Prices Soar as Forecasts for Below Normal US Temperatures

Core Insights - Natural gas prices in the US surged to an 8.5-month high due to expectations of colder weather, which is likely to increase heating demand [2] - The US Energy Information Administration (EIA) has raised its forecast for 2025 natural gas production, indicating a bearish trend for prices [3] - Record high natural gas production and demand were reported, with significant year-on-year increases [4] Group 1: Price Movements - January natural gas prices closed up by +0.292 (+6.41%) on Friday [1] - The rally in natural gas prices is attributed to colder weather forecasts in the US, particularly in the Northeast and Great Lakes regions [2] Group 2: Production and Demand - The EIA increased its forecast for US natural gas production in 2025 by +1.0% to 107.67 billion cubic feet per day (bcf/day) [3] - US dry gas production reached a record 113.4 bcf/day, reflecting an increase of +8.3% year-on-year [4] - Lower-48 state gas demand was reported at 98.6 bcf/day, up +9.2% year-on-year [4] Group 3: Inventory and Storage - Natural gas inventories fell by -11 billion cubic feet (bcf) for the week ending November 21, which was a larger draw than market expectations [6] - As of November 21, natural gas inventories were down -0.8% year-on-year and +4.2% above the 5-year seasonal average [6] - European gas storage was reported to be 77% full, compared to the 5-year seasonal average of 88% [6] Group 4: Rig Count - The number of active US natural gas drilling rigs increased by +3 to 130 rigs, marking a 2.25-year high [7] - The current rig count has risen from a 4.5-year low of 94 rigs reported in September 2024 [7]