Natural gas prices bounce back as forecasts shift

Prices for natural gas nudged up recently as weather predictions turned cooler across most of the country. Traders who had bet against gas prices scrambled to buy back their positions, pushing values higher. A private weather team noted that temperatures could dip below normal in many central and eastern areas through mid-April, before swinging warmer again late in the month. Earlier this spring, prices slid to their lowest point in over a year after unusually mild weather cut heating needs and helped fill storage tanks. While the market got a small boost from cooler forecasts, rising production forecasts continue to weigh on prices. Government analysts recently lifted their estimate for U. S. dry natural gas output in 2026, saying daily production could hit 109. 6 billion cubic feet by then. Current output is running near record levels, and the number of drilling rigs active in gas fields recently hit a two-and-a-half-year peak. On a single day last week, the country pumped 110. 7 billion cubic feet of dry gas, about 3 percent more than the same day last year. Demand from homes and businesses that day was 70 billion cubic feet, down about 4 percent from the previous year. Shipments of liquefied natural gas leaving U. S. ports held steady at 19. 9 billion cubic feet, unchanged from the week before.A potential bright spot for prices comes from trouble abroad. A major liquefied natural gas plant in Qatar suffered serious damage in late March, sidelining about one-fifth of its export capacity for several years. Since that plant supplies one-fifth of the world’s liquefied natural gas, the outage could lift demand for U. S. exports. At the same time, political tensions have limited shipments through a key Persian Gulf shipping lane, tightening supplies for buyers in Europe and Asia. Not everything is pushing prices higher. A trade group reported that electricity generation last week slipped slightly compared with the same week the year before. Over the full year though, power output is still up almost 2 percent. Officials also reported a larger-than-expected build in underground gas storage last week, adding 59 billion cubic feet—more than the usual spring increase. Storage levels now sit nearly 7 percent above last year’s totals and about 6 percent above the five-year average, signaling that supplies remain abundant. Across the Atlantic, European storage levels sit at just 30 percent full, well below the typical spring average of 42 percent. Meanwhile, the count of active U. S. gas drilling rigs dipped last week after hitting a recent high, though the tally remains far above the lows of late 2024.