March Nymex natural gas prices surged by 11.13% to close at $0.436 on Friday, although they remain below Wednesday’s 3-year high. The increase follows a larger-than-expected draw of 242 billion cubic feet in gas storage levels reported by the EIA. Demand is further supported by an ongoing Arctic cold blast across the U.S., which is raising heating needs and expectations for additional drawdowns in storage.
Production disruptions due to freezing temperatures resulted in about 50 billion cubic feet of natural gas, or 15% of total U.S. production, being offline last weekend. As of Friday, U.S. dry gas production was recorded at 110.0 billion cubic feet per day, a 3.4% year-over-year increase, while demand rose significantly to 128.7 billion cubic feet per day, up 38.4% year-over-year.
Despite the production disruptions, Baker Hughes reported an increase in active natural gas drilling rigs, rising to 125, just below a two-year high. The EIA has also revised the forecast for 2026 U.S. dry natural gas production down to 107.4 billion cubic feet per day from a previous estimate of 109.11 billion cubic feet per day, indicating tightening supply dynamics.
