Nymex natural gas prices surged 11.17% on Tuesday, driven by short-covering pressure and colder forecasts for the East Coast. A storm system is expected to bring cold temperatures to the Midwest and Eastern seaboard by the end of December.

US natural gas production is at a near-record high, with the EIA raising its 2025 forecast to 107.74 bcf/day. Active US natural gas rigs recently hit a 2-year high, contributing to bearish price pressure.

US lower-48 dry gas production reached 113.9 bcf/day on Tuesday, up 9.6% year-over-year. Lower-48 state gas demand was at 87.9 bcf/day, while estimated LNG net flows to US export terminals were at 19.5 bcf/day, a 4.9% week-over-week increase.

US electricity output rose 2.3% year-over-year to 85,330 GWh in the week ended December 6, supporting gas prices. Electricity output for the 52-week period ending December 6 also increased by 2.84% year-over-year.

Nat-gas inventories fell by -167 bcf in the week ending December 12, slightly below market consensus but larger than the 5-year average draw. Inventories were down -1.2% year-over-year, signaling ample supply. European gas storage was at 68% capacity, below the 5-year average of 78%.

The number of active US natural gas drilling rigs remained unchanged at 127 in the week ending December 26, just below a 2.25-year high set in November. In the past year, gas rig count has risen from a 4.5-year low of 94 reported in September 2024.

Read more at Yahoo Finance: Nat-Gas Prices Soar on Incoming Cold Weather