**Natural Gas Prices Decline Amid Weather Forecasts and Oil Plunge**
On Wednesday, May Nymex natural gas (NGK26) prices fell by 5.09%, closing at a 7.5-month nearest-futures low. The drop is primarily attributed to above-normal U.S. weather forecasts that are expected to decrease heating demand over the next two weeks, as reported by the Commodity Weather Group. The decline in natural gas prices was further exacerbated by a significant 15% drop in crude oil prices, following a ceasefire agreement between the U.S. and Iran.
In related data, U.S. dry gas production reached 111.0 billion cubic feet per day (bcf/day), representing a year-over-year increase of 3.8%. However, lower-48 gas demand fell to 73.6 bcf/day, a decrease of 13.5% from the previous year. As of March 27, natural gas inventories rose by 36 bcf, signaling ample supplies, with current levels 5.2% higher than last year and 3.0% above the five-year seasonal average. The upcoming EIA report is expected to show an increase in inventories by an additional 48 bcf.
