January Nymex natural gas (NGF26) on Friday closed up +0.124 (+2.92%),
January nat-gas on Friday rallied fairly sharply as early-January forecasts turned colder. Forecasts shifted colder for December 31 to January 4 across the North and West, according to Atmospheric G2.
The EIA announced that this week’s inventory report has been rescheduled from December 24 to December 29 at Noon (ET) due to the Christmas holiday. The market consensus is for a decline of -169 bcf, which would be a larger drop than the 5-year average for the week of -110.
Higher US nat-gas production is bearish for prices. The EIA on December 9 raised its forecast for 2025 US nat-gas production to 107.74 bcf/day from its November estimate of 107.70 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 113.2 bcf/day (+7.9% y/y), according to BNEF. Lower-48 state gas demand on Friday was 87.5 bcf/day (-3.2% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 19.1 bcf/day (unch w/w), according to BNEF.
As a supportive factor for gas prices, the Edison Electric Institute reported on December 10 that US (lower-48) electricity output in the week ended December 6 rose +2.3% y/y to 85,330 GWh (gigawatt hours), and US electricity output in the 52-week period ending December 6 rose +2.84% y/y to 4,291,665 GWh.
Last Thursday’s weekly EIA report was slightly bearish for nat-gas prices, as nat-gas inventories for the week ended December 12 fell by -167 bcf, a smaller draw than the market consensus of -176 bcf but larger than the 5-year weekly average of -96 bcf. As of December 12, nat-gas inventories were down -1.2% y/y and were +0.9% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of December 17, gas storage in Europe was 68% full, compared to the 5-year seasonal average of 78% full for this time of year.
Baker Hughes reported Tuesday that the number of active US nat-gas drilling rigs in the week ending December 26 remained unchanged at 127, just below the 2.25-year high of 130 set on November 28. In the past year, the number of gas rigs has risen from the 4.5-year low of 94 rigs reported in September 2024.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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