# Cold Snap Coming: Natural Gas Futures Rally on Winter Demand Outlook

December Nymex natural gas futures jumped +2.48% on Friday, hitting a one-week peak as weather forecasts signal a significant temperature drop heading into December. Here's what's moving the market:

**The Weather Play**
Atmospheric G2's latest forecast shows the West and Northeast cooling down late November, with a broader chill sweeping the central US through early December—classic heating season setup that could drive residential gas demand.

**Storage Data Supports Prices**
The EIA reported nat-gas inventories contracted by 14 bcf last week, beating expectations of 12 bcf and coming in well below the 5-year average (which shows a +12 bcf seasonal build). This tighter inventory picture provides some floor support for prices.

**Production Headwinds Remain**
Here's the reality check: US nat-gas output hit near-record levels at 111.1 bcf/day (up 7.9% year-over-year), and the EIA just bumped its 2025 production forecast to 107.67 bcf/day. Active drilling rigs are near 2.25-year highs, suggesting supply isn't a constraint.

**The Demand Side**
Lower-48 gas demand sat at 82.8 bcf/day (down 9.2% y/y), partially offset by steady LNG export flows at 17.7 bcf/day. US electricity generation climbed 5.33% year-over-year for the week.

**Bottom Line**: Short-term weather narratives can move prices, but abundant domestic production and modest demand growth suggest rallies could face headwinds. Winter demand and storage dynamics will be the real price drivers.