US natural gas futures fell toward $4.0/MMBtu as forecasts for warmer weather and record production continued to outweigh strong LNG exports and tight storage levels.
US natgas prices fall on Wednesday
Milder conditions are expected to persist through March 12, reducing residential and commercial heating demand, which typically drives winter-season consumption. With temperatures above seasonal norms in key consuming regions, traders anticipate weaker near-term demand, putting downward pressure on prices.
On the supply side, natural gas production remains robust, with February output hovering near record levels. Production rebounded to 104.3 billion cubic feet per day (bcfd) by February 25, recovering from a temporary dip to 100.5 bcfd on February 19, when frozen wells in major producing regions disrupted supply. The steady increase in output highlights the resilience of US producers, who have managed to maintain high supply levels despite weather-related disruptions.
LNG exports remain strong
Meanwhile, liquefied natural gas (LNG) exports remain strong, averaging 15.6 bcfd in February, up from 14.6 bcfd in January. A new daily record of 16.4 bcfd was reached, driven by increased flows to Venture Global’s Plaquemines plant, reflecting sustained global demand for US LNG. High international prices and geopolitical uncertainties have kept US LNG exports elevated, with Europe and Asia continuing to absorb significant volumes.
US gas stockpiles remain below the five-year average
Despite strong exports, US gas stockpiles remain 11% below the five-year average following record withdrawals during the recent cold snap. Storage levels, while tight, have not been enough to offset bearish sentiment caused by robust production and shifting weather patterns. Looking ahead, traders will be closely monitoring updated weather forecasts, storage reports, and potential disruptions to supply and exports that could influence market direction in the coming weeks.
