US natural gas futures dropped toward $3.90 per million British thermal units (MMBtu), hitting their lowest level in more than three weeks, as record-high output and forecasts for milder weather weighed on prices.
US natgas prices fall to over three-week low
The decline comes amid robust production, with gas output in the Lower 48 states climbing to 106.0 billion cubic feet per day (bcfd) so far in March, surpassing February’s record of 105.1 bcfd.
Weather forecasts indicate warmer-than-normal temperatures through April 8, which are expected to curb heating demand and allow utilities to inject more gas into storage. As a result, analysts suggest that gas stockpiles could rise in March for the first time since 2012 and only the second time on record, further pressuring prices. The latest storage report from the EIA showed that inventories remain above historical averages, reinforcing expectations of a softer market in the near term.
US LNG exports remain strong
Despite weaker domestic demand, US liquefied natural gas (LNG) exports remain strong, with gas flows to the eight major US export terminals averaging 15.8 bcfd in March, up from February’s record of 15.6 bcfd. The increase is largely driven by new capacity coming online at Venture Global’s 3.2-bcfd Plaquemines LNG plant in Louisiana, which is gradually ramping up operations.
Looking ahead, traders are closely monitoring weather models, storage levels, and potential shifts in global LNG demand, particularly from Europe and Asia, as any changes in these factors could influence market dynamics. Additionally, geopolitical tensions and developments in US energy policy may play a role in shaping price movements in the coming months.
