Nat-Gas Prices Fall on Warmer Eastern Forecasts

Group 1: Natural Gas Prices and Forecasts - January Nymex natural gas prices fell by -0.166 (-3.77%) on Wednesday, reversing part of Tuesday's rally of +11.17% due to cold-weather forecasts [1] - Forecasts for the East Coast shifted to warmer temperatures for January 3-7, while colder forecasts were issued for the interior West and Plains regions [1] Group 2: Production and Inventory Reports - The EIA rescheduled the inventory report from December 24 to December 29 due to the Christmas holiday [2] - US natural gas production is near record highs, with the EIA raising its 2025 production forecast to 107.74 billion cubic feet per day (bcf/day) from 107.70 bcf/day [2] - US (lower-48) dry gas production was reported at 112.9 bcf/day, an increase of +8.1% year-over-year [3] Group 3: Demand and LNG Flows - Lower-48 state gas demand was reported at 85.2 bcf/day, a decrease of -8.2% year-over-year [3] - Estimated LNG net flows to US LNG export terminals were 18.3 bcf/day, down -4.2% week-over-week [3] Group 4: Electricity Output and Its Impact - US electricity output rose by +2.3% year-over-year to 85,330 GWh for the week ending December 6, and for the 52-week period, it increased by +2.84% year-over-year to 4,291,665 GWh [4] Group 5: Inventory Changes and Market Sentiment - The EIA reported a decrease in natural gas inventories by -167 bcf for the week ending December 12, which was a smaller draw than the market consensus of -176 bcf but larger than the 5-year weekly average of -96 bcf [5] - As of December 12, natural gas inventories were down -1.2% year-over-year and +0.9% above the 5-year seasonal average, indicating adequate supplies [5] - European gas storage was reported to be 68% full, compared to the 5-year seasonal average of 78% [5] Group 6: Drilling Activity - The number of active US natural gas drilling rigs remained unchanged at 127, just below the 2.25-year high of 130 set on November 28 [6] - The number of gas rigs has increased from a 4.5-year low of 94 rigs reported in September 2024 [6]