Nat-Gas Prices Recover on Forecasts for Below-Normal US Temps

Core Insights - Natural gas prices experienced a slight recovery after reaching a three-month low, driven by forecasts of below-normal temperatures in the US that could increase heating demand [1] - The bearish sentiment in the market was influenced by a weekly EIA inventory report showing a smaller-than-expected draw in natural gas inventories [2][7] Inventory and Production - The EIA reported a decrease of 71 billion cubic feet (bcf) in natural gas inventories for the week ending January 9, which was less than the anticipated draw of 91 bcf and significantly below the five-year average of 146 bcf [2][7] - Projections indicate a reduction in US natural gas production, with the EIA lowering its forecast for 2026 production to 107.4 bcf/day from a previous estimate of 109.11 bcf/day [5] Demand and Export Issues - Natural gas feedgas to Cheniere's Corpus Christi LNG export facility and Freeport LNG export terminals has been below normal due to electrical and piping issues, contributing to increased storage levels and downward pressure on prices [3] - US dry gas production was reported at 112.0 bcf/day, reflecting a year-over-year increase of 7.8%, while demand was at 114.1 bcf/day, down 3.2% year-over-year [6] Electricity Output - The Edison Electric Institute reported a year-over-year decline of 13.15% in US electricity output for the week ending January 10, totaling 79,189 GWh, although the output for the past 52 weeks increased by 2.5% [4]