# Natural Gas Rally: Cold Winter Forecast Pushing Prices Higher

December NYMEX natural gas closed up 3.44% on Monday, extending Friday's 4.25% gain to hit a 3.5-month peak. The catalyst? Early-winter weather turning colder than normal across key US regions.

**Supply-Demand Snapshot:**
- Lower-48 dry gas production: 110.0 bcf/day (up 6.6% YoY)
- Gas demand: 77.2 bcf/day (up 5.1% YoY)
- LNG export flows: 16.8 bcf/day (up 13.5% week-over-week)
- US power generation up 1.9% YoY, supporting gas burn

**Key Dynamics:**

The bullish case relies on weather—NOAA's latest forecast shows potential cold snaps, which typically drive heating demand. However, there's a bearish undertone: US nat-gas production is near record highs (EIA raised 2025 forecast to 107.14 bcf/day), and active drilling rigs hit a 2.25-year high at 125 units.

Storage levels remain ample—inventories are up 0.5% YoY and 4.6% above the 5-year seasonal average. European gas storage sits at 83% full vs. the 92% seasonal norm, adding context to global supply dynamics.

**Bottom Line:** Price momentum is real, but structural oversupply from ramped production could cap upside. Winter weather is the near-term wildcard.