Oil and gas prices are gaining as a result of support for carriers due to higher crude oil prices

April Nymex Natural Gas (NGJ26) closed up +0.024 (+0.75%) on Thursday.

Natural gas prices fell on Thursday in sympathy with crude oil and European gas prices amid the Iran conflict. Iran’s supreme religious leader, Ayatollah Mojtaba Khamenei, said on Thursday that Iran’s intervention should be used to close the Strait of Hormuz, and attacks on Arab neighbors in the Gulf will continue. Also, British Defense Secretary Haley said that it is increasingly clear that Iran is laying mines in the Strait of Hormuz that will keep the waterway closed for the foreseeable future.

Net gas prices fell back from their best levels after the EIA’s net gas inventories fell -38 bcf in the week ended March 6, a small drop from expectations of -41 bcf.

A mixed weather forecast also weighed on net gas prices, as the Commodity Weather Group predicted above-average temperatures for the western half of the United States from March 17 to 21, and cooler readings in the east.

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 on Thursday was 112.3 bcf/day (+5.3% y/y). According to BNEF, 48-state gas demand was 84.7 bcf/day (+7.8% y/y) on Thursday. Estimated LNG net flows to US LNG export terminals on Thursday were 20.2 bcf/day (+5.4% w/w), according to BNEF.

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 10, gas storage in Europe was 29% full, compared to the 5-year seasonal average of 43% full for this time of year.

Baker Hughes reported last Friday that the number of rigs drilling for U.S. nite gas fell to -2 to 132 rigs in the week ended March 6, down from the previous week’s 2.5-year high of 134 rigs. Over the past 17 months, the number of gas rigs has risen from a 4.75-year low to 94 rigs reported in September 2024.

As of the date of publication, Amir Espland had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com