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On Monday, January Nymex natural gas (NGF26) closed at $4.91, up by +0.071 (+1.46%), marking a nearly three-year high for nearest-futures due to forecasts of colder US temperatures that significantly boost heating demand. Temperature models indicated colder weather across the eastern US from December 6-10, with further cooling expected from December 11-15.
As of November 12, the EIA raised its forecast for 2025 US natural gas production by +1.0% to 107.67 billion cubic feet per day (bcf/day). Current production is near record highs of 111.8 bcf/day (+6.9% year-over-year). Additionally, LNG net flows to US export terminals were estimated at 18.4 bcf/day (-3.7% week-over-week).
Despite increased production, the latest EIA report revealed that natural gas inventories fell by -11 bcf for the week ending November 21, compared to market expectations of -9 bcf. Current inventories are down -0.8% year-over-year and 4.2% above the five-year seasonal average. Baker Hughes reported a rise in active US natural gas drilling rigs to 130, a 2.25-year high, reflecting growth from a low of 94 rigs in September 2024.
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