Author: Timothy St. John

The price of natural gas futures in the United States slipped this week, hovering close to $3 as demand for heating fall further and temperatures warm.

The LNG rate is expected to remain low since warm weather forecasts are dominating. Natural gas ticked up 1.64% on Thursday but is still around $3.06 per million British Thermal Units. Crude oil likewise climbed 1.41%, but these increases are not likely to be part of a larger bear trend for the market.

Negative sentiment is slipping slightly as Thursday progresses, and the price of gas futures may find a foothold a little above the $3 mark for now. No weather changes or supply level drops can explain the uptick, and we suspect it is the result of minor market correction.

Warm Weather to Persist

Investors should anticipate low prices for the coming weeks since forecasters are calling for warm weather through the beginning of March now. Output is slightly higher across the United States, with the lower 48 states reporting output of 108.5 bcfd for February. That is a slight increase from January’s 106.3 bcfd output.

Now, output is near record highs and production has returned to normal levels since the winter snow and ice have cleared across much of the United States. Export plant outflows are also higher, with major United States plants reporting 18.6 bcfd for February so far. That puts the export numbers on a path to beat out December’s numbers.

Natural gas prices are considered stable for the U.S. market for now, and there is little indication that they will continue to drop or to drop sharply. Instead, we expect prices to remain relatively close to $3, and there is a high probability that the price will stay above that level for the week.

As we move into the last week of February, though, the price of gas futures should shift and move downward in anticipation of decreasing demand, increased injections into the supply, and  warmer temperatures. The weather in March should be warmer than its was in February, leading to less demand for heating and less demand for exports to other countries that will start to see warmer weather as well.

Brent oil is up 1.36% for the day, and heating oil has climbed 1.18%. We believe these are mostly market corrections and not indicators of a rising bull market trend. 

The price of natural gas futures in the United States slipped to $3.02/MMBtu, which marks the lowest point for this commodity since October of last year.

Warming temperatures led to a four-month low for natural gas as heating demand dropped sharply from where it was several weeks ago during the massive cold front. The United States was plunged into extremely cold and icy winter weather in late January and early February, but now the weather has warmed considerably and caused a massive price drop off.

The gains that were made during the last session have completely disappeared and warm weather forecasts continue to keep the price of natural gas low. Those warmer temperatures are expected to start in the southern parts of the United States and spread to the central and northern parts quickly.

U.S. Gas Prices Expected to Remain Low

Prices may shift quickly on Tuesday as markets open back up after the holiday, but the forecasts for mild temperatures will not allow natural gas to move much higher. The weather reports are not the only factor holding back price movement. The latest withdrawal report from the EIA shows that little progress is being made on reducing around-average supply levels.

Those reserve levels are dropping, though, and are no longer near their extreme highs from 2025. That could help bring prices back up if demand picks up. Export levels are still high as well as colder weather dominates in other parts of the world outside the United States.

Last month, gas prices were as high as $7, hitting multi-year highs. Since they have settled down as warm weather creeped in, the market has had a tough time adjusting. Sharp drop-offs have been the norm for the last couple weeks, and investors are baffled by historic decreases. The incredibly high gas prices came at a time when gas reserves were extremely elevated, indicating that there is hope that the market could see another surge like that later this year.

For now, warm weather is expected to remain active across much of the United States and to simply get warmer as February continues. The market may see higher gas demand in the coming months, though, as European Union gas storage levels are around 34%. That could lead to an export surge for the U.S. gas industry.