Cold Weather Forecasts Push Nat-Gas Prices Higher

December Nymex pure fuel (NGZ25) on Thursday closed up by +0.113 (+2.49%).

Dec nat-gas costs prolonged their month-long rally on Thursday to a brand new 8-month nearest-futures excessive.  Forecasts for colder US temperatures on the finish of this month will improve heating demand for nat-gas and are pushing costs increased.   Forecaster Atmospheric G2 mentioned Thursday that forecasts shifted cooler within the western half of the US within the November 18-22 interval and turned colder for November 23-27.  

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Increased US nat-gas manufacturing is a bearish issue for costs.  On Wednesday, the EIA raised its forecast for 2025 US nat-gas manufacturing by +1.0% to 107.67 bcf/day from September’s estimate of 106.60 bcf/day.  US nat-gas manufacturing is presently close to a file excessive, with lively US nat-gas rigs just lately posting a 2-year excessive.

US (lower-48) dry fuel manufacturing on Thursday was 109.7 bcf/day (+7.3% y/y), in line with BNEF.  Decrease-48 state fuel demand on Thursday was 82.7 bcf/day (-1.2% y/y), in line with BNEF.  Estimated LNG web flows to US LNG export terminals on Thursday have been 17.8 bcf/day (+8.9% w/w), in line with BNEF.

As a supportive issue for fuel costs, the Edison Electrical Institute reported Thursday that US (lower-48) electrical energy output within the week ended November 8 rose +0.12% y/y to 73,383 GWh (gigawatt hours), and US electrical energy output within the 52-week interval ending November 8 rose +2.84% y/y to 4,282,302 GWh.

The consensus is that Friday’s EIA nat-gas inventories will improve by +34 bcf for the week ended November 7, near the five-year common of +35 bcf.  The report will probably be launched a day later attributable to Tuesday’s Veterans’ Day vacation.

Final Thursday’s weekly EIA report was impartial for nat-gas costs since nat-gas inventories for the week ended October 31 rose +33 bcf, proper available on the market consensus, however under the 5-year weekly common of +42 bcf.  As of October 31, nat-gas inventories have been up +0.4% y/y and have been +4.3% above their 5-year seasonal common, signaling sufficient nat-gas provides.  As of November 10, fuel storage in Europe was 82% full, in comparison with the 5-year seasonal common of 91% full for this time of 12 months.

Baker Hughes reported final Friday that the variety of lively US nat-gas drilling rigs within the week ending November 7 rose by +3 to a 2.25-year excessive of 128 rigs.  Previously 12 months, the variety of fuel rigs has risen from the 4.5-year low of 94 rigs reported in September 2024. 

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