US Natgas Prices Rise After EIA Data

US natural gas futures climbed to nearly $3 per MMBtu after a larger-than-expected storage draw, with EIA data showing a 54 billion cubic feet withdrawal for the week ended March 20, above forecasts for 44 bcf. This contrasts with a 33 bcf injection a year earlier and a five-year average decline of 21 bcf. Stockpiles fell to 1.829 trillion cubic feet, about 5.2% above year-ago levels and 0.8% above the seasonal average. The latest draw is likely the final withdrawal of the winter season as warmer-than-normal temperatures are expected through early April, reducing demand. In the Middle East, Iran rejected a US ceasefire proposal but talks are said to be ongoing. Despite tensions, US gas prices remain relatively stable due to ample inventories and limited short-term exposure to global markets.

US natural gas futures fell to $2.93 per MMBtu on Thursday, hovering near their lowest level in over three weeks, as traders awaited the EIA’s weekly storage report later in the day, which is expected to show inventories staying slightly above the five-year average. While projections point to a 51 Bcf withdrawal, this will likely be the last weekly withdrawal of the winter season. Temperatures are now forecasted to remain warmer than normal through April 9, limiting gas consumption in the coming weeks. In the Middle East, Iran rejected a US ceasefire proposal and presented its own negotiation framework. Still, the White House said talks with Iran remained ongoing and productive, despite Tehran’s public denials. Despite the geopolitical uncertainty, the US remains largely insulated from external supply shocks, given that domestic output covers all consumption needs, and LNG export capacity is already maxed out, preventing additional exports even if global prices rise.

US natural gas futures traded around $2.90 per MMBtu on Wednesday, hovering at their lowest level in more than three weeks amid hopes that oil exports from the Persian Gulf could resume. The gas market tracked broader weakness across global energy prices following reports that the US is pursuing a month-long ceasefire in its conflict with Iran and has presented a 15-point proposal for negotiations. Additional downward pressure came from weather forecasts indicating temperatures will remain warmer than normal through April 8, which would reduce heating demand in the coming weeks. US natural gas prices have reacted far less to the Middle East war compared to global markets as the country produces all the gas it consumes, and LNG export facilities are already running at full capacity. And so, even if global gas prices surge due to geopolitical tensions, the US cannot significantly increase LNG exports.