Key Takeaways
- U.S. natural gas futures (NG=F) have surged towards the critical $5 per million British thermal units (MMBtu) mark, reaching levels not seen since late 2022, driven by cold weather forecasts and robust liquefied natural gas (LNG) exports.
- U.S. Department of Energy (DoE) crude oil inventories unexpectedly rose by 574,000 barrels for the week ending November 28, contrasting with analyst expectations for a draw, while Cushing crude oil stocks saw a significant draw of 457,000 barrels.
- Millions of Americans are facing severe financial distress, with widespread defaults on student, credit card, and auto loans, signaling a potentially significant challenge to the U.S. economy.
U.S. natural gas futures (NG=F) are experiencing a significant rally, with January contracts pushing towards the $5/MMBtu threshold for the first time since December 2022. The prompt month contract on the New York Mercantile Exchange (NYMEX) reached an intraday high of $4.984 earlier this week, reflecting strong market momentum. This surge is primarily attributed to a combination of strengthening liquefied natural gas (LNG) exports and the onset of colder winter weather across key U.S. regions, including the Midwest and Northeast.
Despite record U.S. natural gas production, which hit an all-time high of 109.6 billion cubic feet per day (bcfd) in November, and near-saturated storage levels, robust heating demand is accelerating weekly inventory withdrawals. LSEG data indicates that benchmark U.S. Henry Hub natural gas futures have climbed over 40% since late September. However, mixed weather forecasts for mid-December, with some models suggesting a potential for warmer temperatures after the initial cold snap, are introducing an element of volatility into the market. The elevated natural gas prices are also prompting some utilities to increase coal-fired electricity generation to manage costs, potentially impacting emissions targets.
In the crude oil market, U.S. Department of Energy (DoE) data for the week ending November 28 revealed an unexpected increase in crude oil inventories by 574,000 barrels. This build defied analyst expectations of a 2.0 million barrel draw and followed a previous week's increase of 2.774 million barrels. Conversely, crude oil inventories at Cushing, Oklahoma, the key delivery hub for West Texas Intermediate (CL=F) futures, saw a notable decrease of 457,000 barrels for the same period. This draw was more substantial than the prior week's decline of 68,000 barrels. The American Petroleum Institute (API) reported a larger crude oil inventory draw of 2.48 million barrels for the week ending November 28, alongside a dip of 89,000 barrels in Cushing inventories.
Meanwhile, the financial health of American consumers is showing alarming signs of deterioration, with millions defaulting on various types of loans. According to reports from Newsweek, student loan delinquencies have surged dramatically following the expiration of pandemic-era payment pauses. Rates jumped to 14.3% in the third quarter from just 0.8% in the fourth quarter of the previous year. An estimated 5.5 million student borrowers are now in default, with an additional 3.7 million over 270 days delinquent.
The consumer credit crunch extends beyond student loans. Credit card balances have reached an all-time high, with serious delinquency rates (90 days past due) climbing to 7.1%, a level reminiscent of pre-financial crisis periods. Auto loan serious delinquency rates have also hit 3%, the highest since 2010, leading to a significant spike in repossessions. In 2025, 2.2 million vehicles have already been repossessed, with forecasts suggesting a record 3 million by year-end. Many of these defaulting borrowers previously held prime or super-prime credit scores, which have now plummeted by an average of 60 points, indicating widespread financial strain across various income brackets.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.