# Why Natural Gas Is on a Rally Right Now

Natural gas futures caught a bid Wednesday, with December Nymex contracts jumping +4.10% as weather patterns shifted colder across the US East and Midwest. Here's what's driving it:

**The weather story:** Late November through early December forecasts are pointing to below-normal temps in the eastern two-thirds of the country. Colder = higher heating demand = more gas burn. Atmospheric G2 flagged the shift Wednesday morning.

**Supply side is mixed:**
- EIA just bumped 2025 US gas production forecast by +1.0% to 107.67 bcf/day—near record territory
- Active US gas rigs hit a 2-year high recently
- Lower-48 dry production running at 109.4 bcf/day, up +7.5% year-over-year

**Inventory pressure building:** Market consensus expects Thursday's EIA report to show nat-gas storage fell -11 bcf for the week ended Nov 14, versus the 5-year average of +12 bcf for that period. That's a pretty sharp swing.

**The catch:** US nat-gas inventories are still sitting +4.5% above their 5-year seasonal average as of Nov 7, so supplies aren't tight overall. European storage at 82% full, below the 90% seasonal normal, adds some tightness there.

**Demand uptick:** Lower-48 gas demand Wednesday clocked 86.2 bcf/day (+10.5% y/y). Electricity generation also ramped, with US output up +5.33% y/y in the week ended Nov 15.

Bottom line: Weather catalysts can move the needle short-term, but record-high production keeps a lid on upside.