US Natural Gas Rises After Sharp Fall

US natural gas futures rose to $2.95 per MMBtu on Tuesday, having fallen 6% to an over three-week low on Monday on warmer weather forecasts that are set to curb heating demand. Forecasts indicated that temperatures will remain above seasonal averages across the western two-thirds of the US through April 1. Meanwhile, traders remain attentive to developments in the Middle East after Iran denied engaging in talks with the US, as President Trump postponed a threat to bomb Iran’s power grid for five days. Despite elevated tensions, US natural gas prices have remained largely stable since the conflict began on February 28, due to ample inventories and limited short-term exposure to global markets. Latest EIA data showed US gas stockpiles at 10.4% above year-ago levels and 2.6% above the five-year average, while LNG export facilities are operating near full capacity.

US natural gas futures extended losses, falling more than 5.5% to around $2.92 per MMBtu on Monday after a 2.2% drop in the prior session, pressured by milder weather forecasts that point to weaker demand for heating and power generation. Temperatures are now expected to run above average across the western two thirds of the US through April 1. Prices were also dragged lower by a broader energy selloff after President Donald Trump said he was in talks to end the war in Iran, prompting declines in oil and outflows from energy futures. Despite geopolitical tensions, US gas has remained relatively stable since the US and Israel attacked Iran on Feb. 28, due to ample inventories and limited short term exposure to global markets. EIA data showed stockpiles were 10.4% above last year and 2.6% above the five year average, while LNG export capacity remains near full utilization, limiting the ability to capitalize further on global supply disruptions.

US natural gas futures traded at around $3 per MMBtu, remaining in a tight range, as investors weighed regional oversupply against tightening global markets amid the Iran war. Higher oil output has lifted associated gas production in the Permian Basin, which makes about a quarter of US supply, but limited pipeline and processing infrastructure has caused a local gas surplus, leading to more flaring. Meanwhile, global LNG exports dropped to a six-month low, highlighting the divide in supply conditions. Shipments fell about 20% to 1.1 million tons, mainly from Qatar and, to a lesser extent, the UAE, as the Strait of Hormuz was disrupted. Escalating tensions with Iran forced shutdowns at Qatar’s Ras Laffan facility, the world’s largest LNG plant, with repairs expected to take years. As a result, recent supply additions from new US and Canadian projects have been nearly offset by losses from Qatar and the near-closure of the passageway.