December Nymex natural gas closed up sharply by +0.227 (+5.23%) on Tuesday, hitting an 8-month futures high. The cold US weather forecast increased heating demand, while higher US nat-gas production remains a bearish factor. Gas prices were supported by rising US electricity output, neutral EIA reports, and record-high gas rig activity.

US (lower-48) dry gas production hit 110.7 bcf/day (+11.7% y/y), with state gas demand at 92.6 bcf/day (+20.1% y/y). LNG net flows to US terminals were 18.1 bcf/day (+4.1% w/w). The Edison Electric Institute noted a rise in US electricity output, while nat-gas inventories and European gas storage levels remain adequate.

The weekly EIA report showed nat-gas inventories rose +33 bcf, in line with market consensus. Gas storage in Europe was at 83% full, below the 5-year average. Baker Hughes reported an increase in active US nat-gas drilling rigs to a 2.25-year high of 128 rigs, up from the previous year’s low of 94 rigs.

Read more at Yahoo Finance: Forecasts for Frigid US Temps Push Nat-Gas Prices Sharply Higher