On Tuesday, April Nymex natural gas prices closed at $3.06 per million British thermal units, up $0.010 (+0.33%), buoyed by a +1% rally in European natural gas prices due to supply concerns from the Shah gas field in the UAE, which was suspended following an Iranian drone strike. Earlier this month, prices surged to a three-year high after Qatar’s Ras Laffan plant, responsible for about 20% of global LNG supply, was also targeted.
US dry gas production stood at 112.1 billion cubic feet per day (bcf/day), a 4.2% year-over-year increase, while lower-48 state gas demand reached 103.7 bcf/day, reflecting a 30.7% rise compared to the previous year. Estimated LNG net flows to US export terminals were 20.0 bcf/day, a weekly increase of 1.7%. Despite high production levels, projections from the EIA forecast US dry natural gas production to average 109.97 bcf/day by 2026, signaling potential bearish trends for prices.
As of March 6, US natural gas inventories were down by 38 billion cubic feet (bcf) from the previous week, slightly better than market expectations of a 41 bcf draw. Gas storage in Europe was 29% full, below the five-year seasonal average of 42%. The number of active natural gas drilling rigs in the US increased to 133, just below a 2.5-year high of 134 rigs.
