March Nymex natural gas (NGH26) prices fell by 0.73% on Tuesday, closing at a four-week low. Forecasts indicate above-average U.S. temperatures, which are expected to reduce heating demand, contributing to the lower prices. According to the Commodity Weather Group, warmer conditions are anticipated across most of the U.S. through February 19, with the exception of the Pacific and Atlantic coasts.
The EIA has revised its forecast for U.S. dry natural gas production in 2026 to 109.97 billion cubic feet per day, up from 108.82 bcf/day last month. Current production is near record levels, with active U.S. rigs at a two-and-a-half-year high of 130. U.S. dry gas production was reported at 112.8 bcf/day (+6.8% year-over-year), while demand was at 94.9 bcf/day (-11.2% year-over-year).
Natural gas prices previously peaked at a three-year high on January 28 due to severe winter weather that disrupted production. A significant freeze-off led to a loss of about 50 billion cubic feet of production, or roughly 15% of the total. The ongoing dynamics in production and demand indicate a tightening market, with recent gas inventories showing a significant draw of 360 bcf against estimates of 378 bcf.
