Cooler US Weather Forecasts Lift Nat-Gas Prices

Core Viewpoint - Natural gas prices have increased due to colder weather forecasts and short-covering ahead of contract expiration, while medium-term support is provided by tighter global LNG supplies, particularly from Qatar's Ras Laffan plant damage [1][2]. Group 1: Price Movements and Influences - April Nymex natural gas closed up by +0.095 (+3.20%) on Friday, driven by cooler weather forecasts that may increase heating demand [1]. - The expiration of the April Nymex natural gas contract led to short-covering, further lifting prices [1]. - Qatar's Ras Laffan plant, which accounts for about 20% of global LNG supply, reported damage that will take 3 to 5 years to repair, potentially reducing global LNG supplies and boosting US nat-gas exports [2]. Group 2: Production and Demand Metrics - US dry gas production reached 113.5 billion cubic feet per day (bcf/day), marking a +5.2% year-over-year increase [3]. - Lower-48 state gas demand was reported at 81.8 bcf/day, reflecting a +9.4% year-over-year increase [3]. - Estimated LNG net flows to US export terminals were 19.9 bcf/day, showing a +0.5% week-over-week increase [3]. Group 3: Inventory and Future Projections - The EIA raised its forecast for 2026 US dry nat-gas production to 109.97 bcf/day, indicating a bearish outlook for prices [4]. - US nat-gas inventories fell by -54 bcf for the week ending March 20, exceeding expectations and the 5-year average draw [4]. - As of March 20, nat-gas inventories were up +4.9% year-over-year and +0.8% above the 5-year seasonal average, indicating ample supplies [4].