Nat-Gas Prices Slide as US Weather Warms

Core Insights - Natural gas prices have declined due to warmer weather forecasts in the US, which are expected to reduce heating demand [1] - Damage to Qatar's Ras Laffan LNG export plant could limit further downside in natural gas prices, as it accounts for 20% of global LNG supply [2] - US natural gas production is at a record high, which may exert bearish pressure on prices [4] Production and Demand - US (lower-48) dry gas production reached 112.7 billion cubic feet per day (bcf/day), reflecting a year-over-year increase of 4.8% [3] - Lower-48 state gas demand was reported at 65.4 bcf/day, showing a significant year-over-year decline of 22.9% [3] - Estimated LNG net flows to US export terminals were 19.9 bcf/day, a slight increase of 0.3% week-over-week [3] Inventory and Supply - Recent EIA reports indicate a rise in natural gas inventories, with an increase of 35 billion cubic feet (bcf) for the week ending March 13, surpassing the 5-year average draw [6] - Natural gas inventories are up 10.3% year-over-year, marking the highest increase in 1.75 years, and are 2.6% below the 5-year seasonal average [6] - European gas storage is currently 29% full, compared to a 5-year seasonal average of 41% [6] Electricity Output - US electricity output increased by 4.1% year-over-year to 75,247 gigawatt hours (GWh) for the week ending March 14 [5] - Over the past 52 weeks, US electricity output rose by 1.7% year-over-year to 4,311,070 GWh [5]