Cold US Temps Spark Fund Buying of Nat-Gas Futures

Core Insights - Natural gas prices in the US experienced a significant rally, reaching a nearly 3-year high due to colder-than-normal weather forecasts, which are expected to increase heating demand [2] - The US dry gas production is currently at 112.0 billion cubic feet per day, reflecting a year-over-year increase of 6.4%, while gas demand is at 113.1 billion cubic feet per day, up 2.6% year-over-year [3] - The Edison Electric Institute reported a year-over-year increase in US electricity output, which supports gas prices, with a rise of 2.11% to 76,459 GWh for the week ending November 29 [4] Production and Inventory - The EIA has raised its forecast for US natural gas production in 2025 by 1.0% to 107.67 billion cubic feet per day, indicating that production levels are near record highs [5] - Recent EIA reports indicate a bullish trend for natural gas prices, with inventories showing a draw of 11 billion cubic feet for the week ending November 21, which was larger than market expectations [6] - As of December 1, European gas storage was reported to be 75% full, compared to a 5-year seasonal average of 85% full, indicating a potential supply concern [6]