On Friday, February Nymex natural gas (NGG26) closed down $0.068 (-1.84%), marking a 2.25-month low for near-futures prices. This decline is attributed to warmer-than-normal weather forecasts across the eastern two-thirds of the U.S. from January 7-11, which may decrease heating demand and increase storage levels.
As of January 2, U.S. dry gas production reached 110.0 bcf/day, reflecting a 4.4% year-over-year increase, while natural gas demand stood at 101.0 bcf/day, a slight 0.3% rise year-over-year. The Energy Information Administration (EIA) forecasts U.S. natural gas production to increase to 107.74 bcf/day by 2025, following a record high in current production levels.
Baker Hughes reported that the number of active U.S. natural gas drilling rigs fell by 2 to 125 as of January 2, down from a recent high of 130 in late November 2024. Meanwhile, as of December 26, nat-gas inventories declined by 38 bcf, with levels 1.7% above the five-year seasonal average.
