June Nymex Natural Gas (NGM26) closed down -0.067 (-2.30%) on Tuesday.
Natural gas prices fell from a six-week high in futures on Tuesday and stabilized lower after the EIA raised its 2026 U.S. natural gas production estimate. Natural gas prices initially rose to a 6-week high on Tuesday amid forecasts of warmer weather in the U.S., which could potentially spark demand for natural gas from electricity providers to drive greater use of air conditioning. The Commodity Weather Group said Tuesday that forecasts have shifted warmer, with above-average temperatures expected across the western half of the U.S. through May 16.
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Projections of greater natural gas production in the United States are negative for prices. On Tuesday, the EIA raised its forecast for 2026 U.S. dry natural gas production to 110.61 bcf/day from an April estimate of 109.60 bcf/day. U.S. natural gas production is currently near a record level, with active U.S. natural gas rigs hitting a two-and-a-half-year high in late February.
On April 17, natural gas prices fell to a near-future 1.5-year low amid strong U.S. gas storage. EIA natural gas inventories as of April 24 were +7.7% above their five-year seasonal average, indicating abundant natural gas supplies in the United States.
The prospect of the Strait of Hormuz remaining closed for the foreseeable future supports natural gas, as the closure will curb natural gas supplies from the Middle East, which could boost US natural gas exports to make up for the shortfall.
US (Lower 48) dry gas production on Tuesday was 108.6 Bcf/day (+1.8% YoY), according to BNEF. Gas demand from the lower 48 states on Tuesday was 68 bcf/day (+10.0% year-over-year), according to BNEF. Estimated net LNG flows to US LNG export terminals on Tuesday were 17.5 bcf/day (+0.8% w/w), according to BNEF.
Natural gas prices have some medium-term support amid prospects for tighter global LNG supplies. On March 19, Qatar reported “extensive damage” to the world’s largest natural gas export plant in the industrial city of Ras Laffan. Qatar said Iran’s attacks damaged 17% of Ras Laffan’s LNG export capacity, damage that will take three to five years to repair. The Ras Laffan plant accounts for about 20% of the world’s supply of liquefied natural gas, and a reduction in its capacity could boost US natural gas exports. Additionally, the closure of the Strait of Hormuz due to the war in Iran has drastically reduced natural gas supplies to Europe and Asia.