April Nymex Natural Gas (NGJ26) closed -0.102 (-3.15%) on Friday.
Natural gas prices on Friday gave up an earlier advance and fell sharply on forecasts for normal US weather, potentially dampening demand for natural gas. Forecasters Atmospheric G2 said Friday that forecasts for the western two-thirds of the U.S. for March 18-22 have turned warmer with broadly average temperatures.
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 (bottom-48) dry gas production was 113.1 bcf/day (+5.2% y/y) on Friday. According to BNEF, 48-state gas demand on Friday was 81.7 bcf/day (+5.5% y/y). According to BNEF, net LNG flows to US LNG export terminals on Friday were 20.2 bcf/day (+4.5% 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 on Wednesday that US (Low-48) electricity production rose +1.00% y/y to 78,133 GWh (gigawatt hours) in the week ending March 7. Also, US electricity production rose +1.69% y/y to 4,309,018 GWh in the 52-week period ending March 7.
Thursday’s weekly EIA report was bearish for net gas prices, as net gas inventories for the week ended March 6 fell -38 bcf, smaller than the market consensus of -41 bcf and the 5-year weekly average draw of -64 bcf. As of March 6, nite gas inventories were +8.8% y/y and -0.9% below their 5-year seasonal average, indicating near-normal gas supply. As of March 11, gas storage in Europe was 29% full, compared to the 5-year seasonal average of 42% full for this time of year.
