May Nymex natural gas (NGK26) prices closed at $2.66 on April 18, 2023, up 0.30% (+$0.008). The increase followed a rally in crude oil prices amid the ongoing closure of the Strait of Hormuz, which contributed to short-covering in natural gas futures. Despite this rebound, warmer U.S. weather forecasts predict reduced heating demand, with above-average temperatures expected in the Midwest through April 25.
Natural gas inventories were reported to be 5.8% above the five-year seasonal average as of April 10, while U.S. dry gas production reached 110.3 billion cubic feet per day, marking a 2.3% year-over-year increase. Ongoing global supply concerns have been bolstered by damage to Qatar’s Ras Laffan gas export plant, which accounts for 20% of the world’s liquefied natural gas supply, creating potential opportunities for U.S. exports.
As of April 19, the U.S. natural gas drilling rig count stands at 125, slightly below the 2.5-year high of 134 achieved in February. Despite fluctuations in prices and supply, projections of higher production could continue to exert downward pressure on natural gas prices in the coming months.
