December Nymex natural gas (NGZ25) on Friday closed down -0.042 (-0.96%).
Dec nat-gas prices settled lower on Friday as forecasts of mild US weather could curb heating demand for nat-gas. Forecaster G2 said Friday that warmer-than-normal temperatures are expected in the western two-thirds of the US for November 12-16 and are expected to remain above-normal for November 17-21. Nat-gas prices extended their losses Friday on the outlook for higher US nat-gas production after a weekly report from Baker Hughes showed active US nat-gas rigs increased to a 2.25-year high.
Higher US nat-gas production is a bearish factor for prices. On October 7, the EIA raised its forecast for 2025 US nat-gas production by +0.5% to 107.14 bcf/day from September’s estimate of 106.60 bcf/day. US nat-gas production is currently near a record high, with active US nat-gas rigs recently posting a 2-year high.
US (lower-48) dry gas production on Friday was 110.0 bcf/day (+8.1% y/y), according to BNEF. Lower-48 state gas demand on Friday was 77.0 bcf/day (-2.7% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 17.3 bcf/day (-0.8% w/w), according to BNEF.
As a supportive factor for gas prices, the Edison Electric Institute reported Wednesday that US (lower-48) electricity output in the week ended November 1 rose +0.05% y/y to 73,730 GWh (gigawatt hours), and US electricity output in the 52-week period ending November 1 rose +2.89% y/y to 4,282,216 GWh.
Thursday’s weekly EIA report was neutral for nat-gas prices since nat-gas inventories for the week ended October 31 rose +33 bcf, right on the market consensus, but below the 5-year weekly average of +42 bcf. As of October 31, nat-gas inventories were up +0.4% y/y and were +4.3% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of November 5, gas storage in Europe was 83% full, compared to the 5-year seasonal average of 92% full for this time of year.
Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ending November 7 rose by +3 to a 2.25-year high of 128 rigs. In the past year, the number of gas rigs has risen from the 4.5-year low of 94 rigs reported in September 2024.
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