Is Weather Demand Too Weak to Support Prices?

Weather forecasts continue to lean bearish. According to NatGasWeather, the next 15 days will bring near-ideal conditions for most of the U.S., with highs in the 60s to 80s dominating the map. This “shoulder season” setup, where neither heating nor cooling demand is significant, is keeping national demand light. Atmospheric G2 further expects above-normal temperatures in the eastern U.S. through April 30, suggesting no weather-based support in the near term.

Production Growth and Storage Trends Undercut Price Support

Supply-side fundamentals remain stubbornly loose. Lower-48 dry gas production on Monday was reported at 106.8 Bcf/d, up 6.9 Bcf year-over-year, while demand lagged at just 65.9 Bcf/d, down 7.3% y/y. Despite LNG feedgas flows of 15.0 Bcf/d, the supply-demand imbalance is pressuring prices lower. Even so, storage is tighter than normal—last week’s EIA report showed a build of just +16 Bcf, well below expectations of +24 Bcf and the 5-year average increase of +50 Bcf. Inventories now sit 3.9% below their five-year average and nearly 21% below last year’s levels.

LNG Expansion and Electricity Demand Offer Long-Term Support

While short-term drivers are bearish, some long-term fundamentals remain constructive. The U.S. is seeing stronger electricity output, with Edison Electric Institute reporting a 6.4% y/y rise in the week ended April 12. This may eventually lift gas demand from utilities. Additionally, the resumption of LNG export approvals under President Trump could unlock new demand in the future, especially if more terminals advance through the approval pipeline.

Will Prices Hold or Slip Below the 200-Day Moving Average?

The 200-day moving average at $2.901 remains critical. Monday’s test held, but with little weather-driven demand ahead and production staying high, downside pressure remains in place.

Near-term outlook leans bearish, with the potential for further declines if support at $2.901 gives way. A hold could spark short-covering, but without a demand driver, rallies are likely to be capped.

More Information in our Natural Gas Futures.