Additionally, European gas storage is at 37% capacity, compared to the five-year seasonal average of 49%, reinforcing global supply concerns. However, U.S. traders remain focused on domestic fundamentals, where inventory tightness continues to underpin long-term price strength.

Could Colder Weather Prevent a Larger Sell-Off?

The latest NOAA forecast for March 17-21 introduced a more bullish factor late last week. The outlook calls for cooler temperatures along the West Coast, while storm systems could help moderate warmth on the East Coast. This shift in expectations sparked short-covering, helping prices recover from early-week losses.

However, the overall forecast remains mixed. While colder systems persist in the northern U.S., milder conditions across the South and East, with highs in the 50s-80s, could limit heating demand. If temperatures trend warmer in subsequent forecasts, natural gas could face renewed selling pressure.

Could Tariffs and LNG Exports Tighten the Market?

Trade policy developments are adding another layer of uncertainty. U.S. tariffs of 10% on Canadian natural gas imports took effect last week, which could put upward pressure on domestic prices as importers adjust. Canada has hinted at retaliatory measures, including a 25% tariff on electricity exports to the U.S., potentially increasing demand for gas-fired power generation.

Meanwhile, LNG exports remain near record highs, with flows to U.S. terminals holding at 15.2 Bcf/d. Additionally, President Trump’s decision to lift restrictions on new LNG export projects could lead to further structural demand growth. The upcoming decision on the Commonwealth LNG facility in Louisiana will be a key development to watch.

Market Forecast: Can Prices Hold Key Levels?