Nat-Gas Prices Slightly Higher as Near-Term Weather Forecasts Turn Colder

December Nymex natural gas recovered from a 1.5‑week low to finish slightly higher (+$0.010, +0.23%) after forecasts turned colder for the central and eastern U.S. toward the Nov. 23–27 period, which could lift near‑term heating demand; U.S. power output trends were also mildly supportive. Offsetting that upside, supply fundamentals remain bearish: Lower‑48 dry production is near record levels at 108.7 bcf/d (+5.8% y/y), the EIA raised its 2025 U.S. production outlook to 107.67 bcf/d, LNG flows eased to 17.1 bcf/d, and last week’s EIA injection of +45 bcf left inventories 4.5% above the five‑year seasonal average, implying any price advance may be limited absent sustained colder weather or supply disruptions.

Analysis

December Nymex natural gas settled up $0.010 (+0.23%) after recovering from a 1.5-week low as updated forecasts turned colder for the central and eastern U.S. during the Nov. 23–27 period, a near-term demand catalyst. Earlier comments from forecaster Atmospheric G2 that temperatures would shift warmer for Nov. 28–Dec. 2 help explain intraday volatility and limit conviction in a sustained breakout.

Supply-side data remain structurally bearish despite the weather-driven blip: the EIA raised its 2025 U.S. production forecast by 1.0% to 107.67 bcf/d (from 106.60 bcf/d), Lower-48 dry production is running near record levels at 108.7 bcf/d (+5.8% y/y), and active gas rigs recently hit multi-year highs before a small pullback to 125 rigs. Demand signals are mixed—Lower-48 gas demand was 87.3 bcf/d (+14.1% y/y) and U.S. electricity output shows modest growth—but LNG net flows eased to 17.1 bcf/d (-4.6% w/w).

Inventories and storage weaken the bullish case: the EIA reported a +45 bcf injection for the week ended Nov. 7, above consensus (+34 bcf) and the five-year average (+35 bcf), leaving U.S. stocks +4.5% above the five-year seasonal average and Europe gas storage at 82% versus a 91% five-year norm. Abundant supply and above-average inventories imply limited upside absent sustained colder weather or supply disruptions; near-term price sensitivity will track weather model revisions, weekly EIA reports, and LNG flow trajectories.

Key Decisions for Investors

• Favor tactical, short-duration long exposure only if multiple weather models confirm sustained colder conditions for the Nov. 23–27 window and beyond,
• Monitor weekly EIA injection reports, BNEF production figures, and Baker Hughes rig counts closely; step back from size or take profits if injections remain above consensus,
• Consider hedging existing long nat-gas positions or using options to protect against downside given higher 2025 production and inventories,
• Watch LNG flows and European storage (currently 82% vs five-year 91%) for demand-led upside that could tighten markets and support prices