Huge Natural Gas Withdrawal Could Impact Futures
Natural gas prices could change swiftly if the new EIA report shows higher than expected withdrawals during the recent cold weather.
Quick overview
- Natural gas futures remain steady at $3.38 as investors await the upcoming EIA report.
- Forecasts indicate a significant withdrawal of approximately 379 bcf from U.S. natural gas reserves this week, up from 242 bcf last week.
- Despite a decrease in futures prices, strong global demand and recent cold weather may impact future price movements.
- Production levels are expected to normalize next week, which could help meet the high demand for natural gas.
There is little change for Thursday in U.S. natural gas futures as investors wait for the next EIA report to release, but early data indicates a massive withdrawal from gas reserves for the week.
Forecasts estimate that about 379 bcf was withdrawn from U.S. natural gas reserves this week, which would be up from last week’s 242 bcf. That late January withdrawal was already above estimates, but the U.S. reserves still sit about 5% above the 5-year average.
Natural gas futures are now at $3.38, with a decrease of 2.3% over the last day. The weekly EIA report could change things, though, and withdrawal estimates may have been undervalued by how much the gas reserves have diminished. With over a week of harshly cold weather for much of the United States, reserves have been drastically reduced, and that could bring the price of gas futures back up from recent lows.
Weather Forecasts Fight with Reserve Levels to Control Gas Prices
The largest LNG export plants in the United States have averaged 18.3 bcfd for February so far, and that is an increase of about 2.8%. This data indicates that the demand for natural gas is very strong around the world, and buyers are dipping into the gas reserves that have been bult up over months of irregularly high gas injections throughout 2025.
The forecasts call for warm weather next week for much of the United States, but the Northeast is expected to develop colder weather over the same period. Production is still down in most of the U.S. as gas plants try to ramp back up operations after freezing cold weather brought a halt to work. Production levels should be back to normal by next week, according to industry reports, and that will help the country to meet the still-high demand from other nations around the world where cold weather has prevailed.
Natural gas futures are down considerably from their January highs. The price had reached more than $5 for the first time since 2022, and demand spiked for a short period. Now that the market is settling down to normal, investors should watch reserve levels and withdrawal data, as these will be some of the strongest price drivers until the weather forecast changes.
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