Nat-Gas Prices Soar on Incoming Cold Weather

Core Insights - January Nymex natural gas prices increased by 11.17% to close at +0.443, driven by heavy short-covering and colder weather forecasts for the East Coast [1] - The EIA raised its 2025 US natural gas production forecast to 107.74 billion cubic feet per day (bcf/day), indicating a bearish outlook for prices due to high production levels [2] - US dry gas production reached 113.9 bcf/day, a 9.6% year-over-year increase, while demand decreased by 12.6% year-over-year to 87.9 bcf/day [3] Production and Demand - US natural gas production is near record highs, with active drilling rigs at a two-year peak of 127 [2][6] - Estimated LNG net flows to US export terminals were 19.5 bcf/day, reflecting a 4.9% week-over-week increase [3] - Electricity output in the US rose by 2.3% year-over-year to 85,330 GWh, supporting gas prices [4] Inventory and Storage - Natural gas inventories fell by 167 bcf for the week ending December 12, which was less than the market consensus but above the five-year average [5] - As of December 17, European gas storage was 68% full, below the five-year seasonal average of 78% [5]