Natural Gas Slides as US Output Hits All-Time High

Dec natural gas futures dropped 0.68% on Monday, caught between two opposing forces: mixed weather patterns and record-breaking production numbers.

The bearish pressure:

US lower-48 nat-gas output surged to 112.2 bcf/day—an all-time record. This production spike is a major headwind for prices. BNEF data shows output up 8.3% year-over-year, with active drilling rigs at a 2-year high (127 rigs as of Nov 21). The EIA recently bumped its 2025 forecast by 1% to 107.67 bcf/day, signaling sustained supply strength.

Weather story complicates things:

Forecasters called for a mixed pattern: colder across the eastern two-thirds of the US (Nov 29-Dec 3) but warmer in the Southeast and West. That offsetting warmth could dampen heating demand in key regions.

But here’s the bullish angle:

US electricity output jumped 5.33% YoY for the week ending Nov 15, reaching 75,586 GWh—gas demand staying robust. Last week’s EIA inventory report showed a -14 bcf draw, beating consensus (-12 bcf) and the 5-year average (+12 bcf). Storage levels remain 3.8% above seasonal norms, indicating no crisis, but the larger-than-expected draw did provide some support.

The broader picture: record production is the dominant theme, but demand metrics suggest the market isn’t drowning in supply yet.