On December 5, January Nymex natural gas prices surged by +0.226 (+4.46%), reaching a nearly three-year high due to forecasts predicting significant colder-than-normal temperatures across the eastern U.S. from December 10-14. This expected cold front is anticipated to heighten heating demand as fall temperatures remain substantially below average, consequently reducing natural gas storage levels.
In related data, U.S. dry gas production was reported at 111.7 bcf/day, marking a 7.2% year-on-year increase, while demand decreased slightly to 113.3 bcf/day, down 1.2% year-on-year. Additionally, LNG net flows to U.S. export terminals were at 18.3 bcf/day, a decline of 1.2% week-on-week. Current inventories are down 0.4% year-on-year and 5.1% above the five-year seasonal average, indicating sufficient supply.
The Baker Hughes report noted a slight decrease in active U.S. natural gas drilling rigs, totaling 129 for the week ending December 5, just below the two-year high of 130 from November 28. Over the past year, the number of rigs has increased from 94, which was the lowest in over four years as of September 2024.
