April Nymex Natural Gas (NGJ26) closed -0.066 (-2.07%) on Monday, reversing part of last Friday’s +6.09% rally.
April crude oil prices hit a 5-week high on Monday but then fell back and closed the day lower.
Nat gas prices rallied early on Monday as crude rose more than +10% after Israel bombed 30 Iranian oil depots on Saturday. However, oil prices fell later in the day after G-7 finance ministers said they were ready to release strategic oil reserves if needed. Additionally, President Trump said in a phone interview with CBS News that “I think the war is pretty much done, pretty much” and that the military operation is “far behind” its 4-5 week schedule.
Natural gas prices in Europe hit a three-year high last Tuesday due to the war in Iran. Last Monday, Qatar shut down its Ras Laffan plant, the world’s largest natural gas export facility, after it was hit by an Iranian drone. The Ross Laffan plant accounts for about 20% of global liquefied natural gas supplies, and its shutdown could boost U.S. liquefied natural gas exports.
According to BNEF, US (low-48) dry gas production on Friday was 113.6 bcf/day (+6.4% y/y). According to BNEF, 48-state gas demand on Friday was 77.6 bcf/day (-17.4% y/y). According to BNEF, net LNG flows to US LNG export terminals on Friday were 19.5 bcf/day (-0.7% w/w).
Estimates for higher US gas production are lower for prices. On February 17, the EIA raised its forecast for 2026 US dry nitre gas production to 109.97 bcf/d from last month’s estimate of 108.82 bcf/d. U.S. net gas production is currently near record highs, with active U.S. net gas rigs posting a 2.5-year high last Friday.
As a positive factor for gas prices, the Edison Electric Institute reported last Wednesday that US (min-48) electricity production rose +7.84% y/y to 82,888 GWh (gigawatt hours) in the week ending February 28. Also, US electricity production rose +1.8% y/y to 4,308,245 GWh in the 52 weeks ended February 28.
Last Thursday’s weekly EIA report was bullish for net gas prices, as net gas inventories fell -132 bcf for the week ended Feb. 27, a large deviation from the market consensus of -124 bcf and the 5-year weekly average draw of -96 bcf. As of February 27, nite gas inventories were +7.2% y/y and -2.2% below their 5-year seasonal average, indicating near-normal gas supplies. As of March 4, gas storage in Europe was 30% full, compared to the 5-year seasonal average of 44% full for this time of year.
