US Natgas Prices Snap 3-Day Gain

US natural gas futures dropped to $3 per MMBtu on Wednesday, ending a three-day winning streak, as global energy prices eased following reports that Iran may be open to talks to end the Middle East conflict. The world’s largest LNG plant in Qatar remains offline, and the Strait of Hormuz is largely closed, sustaining supply concerns, though President Donald Trump said the US would ensure vessels and provide naval escorts if needed. Domestically, warmer weather forecasts suggest inventories could rise above normal by mid-March. Also, production remains strong while LNG exports hit a record in February.

US natural gas futures rose above $3 per MMBtu on Wednesday, extending a three-day advance, driven by ongoing supply disruptions in the Middle East. Hostilities entered a fifth day in the region, with Israeli and US strikes on Iran that have prompted retaliatory attacks on regional energy infrastructure. Iraq has also cut about half its crude production due to storage limits and blocked exports, with the risk of halting nearly 3 million bpd if shipments do not resume. Meanwhile, President Donald Trump said the US would provide insurance for vessels to help maintain the flow of energy and trade, with naval escorts on standby if necessary. Elsewhere, the Midwest and Northeast are expected to experience their warmest weather since October later this week, with temperatures above the seasonal average, which could reduce near-term natural gas demand.

US natural gas futures climbed more than 5% to around $3.11 per MMBtu on Tuesday, building on Monday’s 3.5% gain amid concerns of further supply disruptions due to widening conflict in the Middle East. A high-ranking Iranian official on Monday said the Strait of Hormuz has been closed and warned that it would “burn any ship” attempting to transit the strategic waterway. The Strait is a critical chokepoint for global energy flows, accounting for roughly 20% of LNG exports, primarily from Qatar. Compounding the risk, QatarEnergy, one of the world’s largest LNG producers, halted operations after Iranian drones targeted its Ras Laffan and Mesaieed facilities. Any prolonged disruption could boost demand for US LNG, particularly as the domestic natural gas market is running a 0.3% deficit relative to its five-year average.