U.S. Henry Hub natural gas futures (NATGAS) are rising today after the contract rollover, driven by record-high gas flows to LNG export facilities, forecasts of cooler weather on the U.S. East Coast, a decline in production, and higher demand.
- Currently, U.S. gas inventories remain about 12% below normal levels for this time of year, following deep freezes in January and February that forced companies to draw heavily from storage.
- According to LSEG data, natural gas production in the Lower 48 U.S. states rose to 105.8 billion cubic feet per day (bcfd) at the beginning of March, compared to 105.1 bcfd in February. However, on Tuesday, daily production was expected to drop by as much as 2.7 bcfd to a three-week low of around 104.1 bcfd.
- Estimated U.S. gas demand, including exports, is set to rise from 107.4 bcfd to 110.5 bcfd next week, with LSEG revising its Monday forecast higher.
- The volume of gas flowing to the eight largest U.S. LNG export terminals increased to an average of 15.7 bcfd at the start of March, surpassing the previous record of 15.6 bcfd in February.
Weather conditions in the U.S. are expected to remain near seasonal norms through April 2. However, the latest NOAA forecast revisions indicate a temperature drop on the East Coast and in the central U.S., while the West Coast is expected to see a significant temperature rise. At this stage of the season, the cooling trend in the central and eastern states is more significant in terms of gas demand due to higher population density and a more intense heating season.
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Source: Bloomberg Finance, NOAA
Gas Price Rally Stalls at Key Resistance Zone
The gas price rally has paused today at a significant resistance area, defined by previous price reactions.
Source: xStation5
