Natural gas futures saw a solid bounce on Friday, with December contracts climbing 2.48% to notch a one-week high. The catalyst? Weather forecasters are calling for a cold snap across the US—temperatures dropping in the West and Northeast starting late November, spreading to the Midwest in early December. Colder weather typically means higher heating demand, which should support gas prices.

On the data front, EIA reported nat-gas storage fell 14 bcf for the week ending Nov 14—bigger than the expected 12 bcf draw and well below the 5-year average of a +12 bcf build. That's a bullish signal for prices. However, headwinds are building: US gas production hit near-record levels at 111.1 bcf/day (up 7.9% year-over-year), and the EIA just raised its 2025 production forecast to 107.67 bcf/day. Active gas drilling rigs jumped to 127 this week, closing in on the 2.25-year high of 128 rigs.

Electricity demand added some support too—US power output in the week ending Nov 15 rose 5.33% year-over-year. But European storage is looking slack at 81% full versus the seasonal average of 90%, which could weigh on LNG export flows.