On Monday, March Nymex natural gas prices fell sharply by 25.65%, closing at a loss of $1.117 and reaching a three-week low. This was primarily driven by a recovery in U.S. production, which rose to 111.6 billion cubic feet (bcf) per day, its highest in nearly two weeks, as production resumed following disruptions from last week’s winter storm.
Production cuts during the storm had previously caused prices to surge, with about 50 bcf going offline, equivalent to 15% of total U.S. output. Current data shows U.S. natural gas demand at 117.3 bcf/day, reflecting a 34.4% year-over-year increase, while LNG net flows to U.S. export terminals surged to 18.4 bcf/day, an 85.9% weekly increase.
Despite the recent drop in prices, projections indicate potential support for natural gas as the EIA has slightly downgraded the forecast for 2026 production. However, the Edison Electric Institute recently reported a 6.3% year-over-year decline in electricity output for the week ending January 24, coinciding with ample supply as natural gas inventories remain 9.8% above last year’s levels.
