Nat-Gas Prices Drop as Inventories Fall Less Than Expected

Price Movements - March Nymex natural gas closed down by -0.015 (-0.50%) after an early advance [1] - Natural gas prices initially rose due to forecasts of colder weather in the US, expected to increase heating demand [2] - Prices fell to a 4-month low on forecasts of above-normal temperatures in the eastern US, potentially reducing heating demand [3] Production and Demand - US dry gas production was reported at 113.1 bcf/day, a 12.4% increase year-over-year [4] - Lower-48 state gas demand was 87.5 bcf/day, a decrease of 33.6% year-over-year [4] - Estimated LNG net flows to US export terminals were 19.7 bcf/day, a 2.4% increase week-over-week [4] Future Projections - The EIA raised its forecast for 2026 US dry natural gas production to 109.97 bcf/day from 108.82 bcf/day [5] - Current US natural gas production is near record highs, with active rigs at a 2.5-year high [5] Weather Impact - A significant storm on January 28 caused natural gas prices to surge to a 3-year high due to Arctic cold weather disrupting production [6] - Approximately 50 billion cubic feet of natural gas, or about 15% of total US production, went offline due to freeze-ups [6] Electricity Output - US electricity output in the week ended February 14 fell by 1.61% year-over-year to 83,348 GWh [7] - However, electricity output over the 52-week period ending February 14 rose by 2.36% year-over-year to 4,314,431 GWh [7]