**Natural Gas Prices Fall Amid Rising Inventories and Production**
On Thursday, May Nymex natural gas closed down 0.67%, marking a five-week low due to a significant increase in inventories. The Energy Information Administration (EIA) reported a rise of 36 billion cubic feet (bcf) for the week ending March 27, surpassing the five-year average of a 4 bcf draw. In the same period, U.S. dry gas production was reported at 111.8 bcf/day, a 4.7% year-over-year increase, while demand fell to 72.6 bcf/day, down 3.8% year-over-year.
Contributing to bearish market conditions, forecasts predict above-average temperatures across the eastern U.S. until April 6, reducing heating demand. Conversely, global liquefied natural gas (LNG) supply tightness may support prices in the medium term, as Qatar’s Ras Laffan Industrial City sustained significant damage, impacting 17% of its LNG export capacity. Baker Hughes indicated that the count of active U.S. natural gas drilling rigs rose by three to 130 as of April 3, remaining below the 2.5-year high of 134 rigs in late February.
