April Nymex Natural Gas (NGJ26) closed Monday down -0.066 (-2.07%), recovering some of last Friday’s rally of +6.09%.
April natural gas prices rose to a five-week high on Monday, but then retreated and closed the day lower.
Natural gas prices initially rose on Monday as crude oil soared more than 10% after Israel bombed 30 Iranian fuel depots on Saturday. However, oil prices fell again later in the day after G-7 finance ministers said they were willing to release strategic oil reserves if necessary. Additionally, President Trump told CBS News in a phone interview that “I think the war is basically complete” and that the military operation is “a long way off” from its 4-5 week timeline.
Natural gas prices rose last week, and last Tuesday European natural gas prices hit a three-year high due to the war in Iran. Last Monday, Qatar shut down its Ras Laffan plant, the world’s largest natural gas export facility, after it was targeted by an Iranian drone attack. The Ras Laffan plant accounts for about 20% of the world’s supply of liquefied natural gas and its closure could boost US natural gas exports.
US (Lower 48) dry gas production on Friday was 113.6 Bcf/day (+6.4% YoY), according to BNEF. Gas demand from the lower 48 states on Friday was 77.6 bcf/day (-17.4% year over year), according to BNEF. Estimated net LNG flows to US LNG export terminals on Friday were 19.5 bcf/day (-0.7% w/w), according to BNEF.
Projections of greater natural gas production in the United States are bearish for prices. On Feb. 17, the EIA raised its forecast for U.S. dry natural gas production in 2026 to 109.97 bcf/day from last month’s estimate of 108.82 bcf/day. U.S. natural gas production is currently near a record level, with active U.S. natural gas platforms hitting a two-and-a-half-year high last Friday.
As a positive factor for gas prices, the Edison Electric Institute reported last Wednesday that US (Lower 48) electricity production in the week ending February 28 increased +7.84% year-over-year to 82,888 GWh (gigawatt hours). Additionally, US electricity production in the 52-week period ending February 28 increased +1.8% year-on-year to 4,308,245 GWh.
Last Thursday’s EIA weekly report was bullish for natural gas prices, as natural gas inventories for the week ended February 27 fell by -132 bcf, a larger drop than the market consensus of -124 bcf and the 5-year weekly average drop of -96 bcf. As of February 27, natural gas inventories increased +7.2% year-on-year and -2.2% below their five-year seasonal average, indicating near-normal natural gas supply. As of March 4, gas storage in Europe was 30% full, compared to the five-year seasonal average of 44% for this time of year.