February Nymex natural gas closed down nearly 7% on Friday, hitting a 2.5-month low due to warmer US weather forecasts reducing heating demand and allowing storage levels to rebuild. US nat-gas production is at a record high, with active rigs reaching a 2-year peak.

US lower-48 dry gas production was up 10.7% year-over-year, while state gas demand dropped by 28.1%. LNG net flows to US export terminals saw a slight increase week-over-week. The Edison Electric Institute reported a significant rise in US electricity output, which could support gas prices.

The weekly EIA report showed a larger-than-expected draw in nat-gas inventories, signaling ample supplies. European gas storage is 58% full, below the 5-year average. Baker Hughes reported a modest decrease in active US nat-gas drilling rigs, which remain above last year’s low.

Rich Asplund did not hold positions in mentioned securities. The information provided is solely for informational purposes. Source: Barchart.com.

Read more at Yahoo Finance.: Nat-Gas Prices Sink on Warm US Weather Forecasts