March Nymex natural gas (NGH26) on Friday closed up by +0.051 (+1.70%).
March nat-gas prices on Friday settled higher on a shift in US weather forecasts to colder temperatures, potentially boosting heating demand for nat-gas. On Friday, the Commodity Weather Group said that forecasts shifted colder, with below-normal temperatures expected across the US Midwest through February 24.
US (lower-48) dry gas production on Friday was 113.4 bcf/day (+12.5% y/y), according to BNEF. Lower-48 state gas demand on Friday was 91.6 bcf/day (-30.3% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Friday were 19.8 bcf/day (+1.5% w/w), according to BNEF.
Projections for higher US nat-gas production are bearish for prices. Last Tuesday, the EIA raised its forecast for 2026 US dry nat-gas production to 109.97 bcf/day from last month's estimate of 108.82 bcf/day. US nat-gas production is currently near a record high, with active US nat-gas rigs posting a 2.5-year high last Friday.
Natural gas prices surged to a 3-year high on January 28, driven by the massive storm that disrupted the US with Arctic cold weather. The well below normal temperatures caused freeze-ups in gas wells, disrupted production in Texas and elsewhere, and drove a spike in demand for natural gas for heating. About 50 billion cubic feet of natural gas came offline, or about 15% of total US natural gas production, due to freeze-ups.
As a negative factor for gas prices, the Edison Electric Institute reported Thursday that US (lower-48) electricity output in the week ended February 14 fell -1.61% y/y to 83,348 GWh (gigawatt hours). However, US electricity output in the 52-week period ending February 14 rose +2.36% y/y to 4,314,431 GWh.
Thursday's weekly EIA report was bearish for nat-gas prices, as nat-gas inventories for the week ended February 13 fell by -144 bcf, a smaller draw than the market consensus of -149 bcf and the 5-year weekly average draw of -151 bcf. As of February 13, nat-gas inventories were down -1.5% y/y and -5.6% below their 5-year seasonal average, signaling tight nat-gas supplies. As of February 18, gas storage in Europe was 32% full, compared to the 5-year seasonal average of 49% full for this time of year.
Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ending February 20 was unchanged at a 2.5-year high of 133 rigs. In the past year, the number of gas rigs has risen from the 4.75-year low of 94 rigs reported in September 2024.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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