Chilly Weather Ignites Natural Gas Market Buzz

The natural gas market saw a significant boost on Wednesday, with prices climbing by 3. 20%. This surge was driven by forecasts of colder-than-average temperatures sweeping across the US, particularly in the Northeast and Great Lakes regions. The chillier weather is expected to last through the end of the week and return mid-month, which has investors betting big on natural gas futures. Production numbers show that the US is currently generating around 112. 0 billion cubic feet of dry gas per day, a 6. 4% increase compared to last year. Meanwhile, demand is slightly higher at 113. 1 billion cubic feet per day, up 2. 6% from the previous year. Liquefied natural gas (LNG) exports are also playing a role, with net flows to export terminals at 17. 5 billion cubic feet per day, down 4. 9% from the previous week. Electricity output in the US has been on the rise, which could support gas prices. In the week ending November 29, electricity production increased by 2. 11% year-over-year. Over the past 52 weeks, output has grown by 2. 99%, reaching a total of 4, 289, 746 gigawatt hours. However, not all news is positive for natural gas prices. The Energy Information Administration (EIA) recently raised its forecast for 2025 US natural gas production, predicting a 1. 0% increase to 107. 67 billion cubic feet per day. This rise in production, coupled with a recent two-year high in active gas rigs, could put downward pressure on prices. Looking ahead, market watchers are expecting a draw of 18 billion cubic feet in the weekly EIA natural gas inventories report for the week ended November 28. The previous week's report showed a draw of 11 billion cubic feet, which was larger than expected but still less than the five-year average. In Europe, gas storage levels are currently at 75% full, which is lower than the five-year seasonal average of 85% for this time of year. This could indicate tighter supplies in the region.