Natural Gas Lifts Following Five-Month Low from Previous Session
Natural gas is up today after export data showed excellent sales, but mild temperature may bring the price back down soon.
Quick overview
- LNG futures in the U.S. fell to a five-month low on Tuesday but rebounded on Wednesday due to positive export data.
- Exports of U.S. natural gas reached 18.7 billion cubic feet per day in February, boosting futures closer to $3.
- Despite the recent recovery, experts warn that demand may decrease as warmer temperatures approach, impacting future prices.
- Gas production remains high, with levels expected to normalize this summer, while analysts predict potential price tests around $2.75.
LNG futures in the United States fell to a five-month low late in the session on Tuesday but then surged higher on Wednesday on positive export data.
Exports for U.S. natural gas plants helped to lift gas futures closer to $3 on Wednesday. The price had fallen to $2.83 on Tuesday, which was the lowest price data for the commodity since September 2025. However, futures pushed up to $2.89 by the afternoon stretch of the Wednesday session.
Export data shows that the United States is shipping LNG to trade partners at an impressive rate- up to 18.7 billion cubic feet per day for the month of February. This may not last for long, industry experts warn, since demand is expected to drop as mild temperatures settle around the globe.
Gas Prices Rebound
Gas futures are recovering from yesterday’s tough session, but investors should anticipate prices dropping again soon. As warm weather approaches, it should not leave much room for cold snaps this late in winter. The temperature for much of the United States should be warmer than usual in early March, according to weather forecasts, and that will drive down demand for natural gas.
At the same time, gas reserves are filling up and will likely hit normal levels this summer. January’s severe ice storm drained the inventories for days, but the impact has not led to abnormally high prices. Gas futures have trended down on the wide outlook since February 13th.
As February draws to a close and summer begins, there is far less risk that the warming weather will suffer any disruptions from cold temperatures. Supplies should mostly remain abundant throughout the spring and summer, and experts are likely to slow down to reflect diminishing demand.
Production is still high across much of the United States, and the lower 48 states are recording production output around 108.7 bcfd for February. That is higher than January’s production levels and will quickly ensure that the storage levels, now 6% below normal, will quickly recover.
The next test for natural gas futures may be around $2.75 at around 88% of the Fibonacci retracement. We could see a test at this price later this week, and Wednesday’s gains may quickly be overturned. Analysts agree, though, that if the current price holds and the futures retain their progress, they may activate a bullish reversal.
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