Frigid US Weather Catapults Nat-Gas Prices to a 3-Year High

Core Insights - Natural gas prices have surged over 60% in three days, reaching a three-year high due to forecasts of Arctic weather impacting the US, increasing heating demand and potentially disrupting production [1] - Texas is expected to experience frigid conditions, raising the risk of temporary outages and reduced natural gas production, prompting disaster declarations from the governor [2] Price Movements - February natural gas closed up by +0.170 (+3.49%) on Thursday, continuing a parabolic rally [1] - Weekly EIA report indicated a larger-than-expected draw in natural gas inventories, with a decrease of -120 billion cubic feet (bcf) compared to expectations of -98 bcf [3][7] Production and Supply Dynamics - The EIA has revised its forecast for US dry natural gas production in 2026 down to 107.4 bcf/day from 109.11 bcf/day, supporting price stability [4] - Current US dry gas production stands at 110.3 bcf/day, reflecting a year-over-year increase of +9.0% [5] Demand and Inventory Levels - Lower-48 state gas demand was reported at 112.6 bcf/day, a decrease of -15.0% year-over-year [5] - Natural gas inventories are currently up +6.0% year-over-year and +6.1% above the five-year seasonal average, indicating sufficient supply levels [7]