Natural Gas Dips as US Production Hits Record High

Nymex December natural gas futures closed down 0.68% on Monday, pressured by mixed weather patterns and surging domestic output.

The headwinds:

US Lower-48 dry gas production reached an all-time high of 112.2 bcf/day on Monday—up 8.3% year-over-year. This record supply is weighing heavy on prices. The EIA recently bumped up its 2025 production forecast to 107.67 bcf/day, and with active drilling rigs near 2-year highs (127 rigs), more gas is coming online.

Weather forecasts are also mixed. While the eastern two-thirds of the US faces colder conditions through early December (bullish for heating demand), the Southeast and West are trending warmer—a net negative for consumption.

What’s supporting prices:

Last week’s EIA inventory report showed a 14 bcf draw, beating consensus expectations of 12 bcf. However, storage remains adequate at 3.8% above the 5-year average. On the demand side, US electricity generation jumped 5.33% year-over-year in the week ending November 15, signaling solid power sector consumption.

The bigger picture: Record production + mixed heating demand + adequate inventory = downside pressure. Gas storage in Europe sits at 81% full versus a 90% seasonal average, suggesting global supply isn’t tight either.