U.S. natural gas prices have increased by approximately 2%, reaching a one-week high, driven by record flows to liquefied natural gas (LNG) export facilities and a decline in daily production. On the New York Mercantile Exchange, front-month gas futures for April delivery rose by 8.5 cents, or 2.1%, bringing the price to $4.137 per million British thermal units (mmBtu) as of 8:52 a.m. EDT. This rise marks the highest closing level since March 11. Despite this price surge, forecasts suggest a decrease in demand over the coming weeks due to mild weather conditions expected through early April.
This anticipated reduction in demand is likely to result in lower withdrawals from gas storage by utilities. However, current gas stockpiles remain approximately 12% below average for this time of year, reflecting the significant withdrawals made during the extreme cold of January and February. In terms of supply, data from financial firm LSEG indicates that average gas output in the Lower 48 U.S. states reached 105.8 billion cubic feet per day (bcfd) in March, up from a record 105.1 bcfd in February. Nonetheless, a daily output drop of around 2.8 bcfd was reported, preliminarily bringing output to a three-week low of 103.9 bcfd.
Traders attribute this decline to seasonal pipeline maintenance activities in states like Texas, which have caused spot prices at the Waha Hub to dip below zero. Looking ahead, meteorologists predict weather in the Lower 48 states will stay largely normal through early April. LSEG forecasts also anticipate an increase in average gas demand from 106.7 bcfd this week to 109.8 bcfd next week, although these predictions have been adjusted downward since earlier in the week. The U.S. continues to solidify its position as the world’s leading LNG supplier, with flows to major export plants averaging 15.7 bcfd this March.