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At 12:01 GMT, Natural Gas Futures are trading $4.204, up $0.100 or +2.44%.
How Did Last Week’s Fundamentals Influence Market Sentiment?
Despite early-week gains, fundamental factors remain a concern. Last week, mild temperatures suppressed heating demand, keeping a lid on prices. Most of the U.S. saw unseasonably warm conditions, with highs ranging from the upper 50s to 80s. While a brief cooldown is expected this week, forecasts suggest above-normal temperatures will persist through late March, further dampening demand.
Weak consumption has reinforced the seasonal transition into the storage build period, limiting any sustained bullish momentum. Without a significant weather shift, demand remains a headwind for natural gas prices.
Can Storage and Production Trends Provide Support?
Even with weak demand, storage remains tight compared to historical averages. The latest EIA report showed a larger-than-expected withdrawal of 62 Bcf for the week ending March 7, pushing inventories 11.9% below the five-year average. While this helped stabilize prices briefly, it has not been enough to drive a lasting uptrend.
On the supply side, Lower-48 dry gas production remains steady, averaging 107.1 Bcf/day, a 4.6% year-over-year increase. Total demand reached 77.0 Bcf/day, up 5.7% from last year. Meanwhile, LNG export flows slipped slightly to 15.2 Bcf/day due to maintenance-related disruptions.
Market Forecast: Will Upside Momentum Hold?
While early-week price action suggests some bullish interest, fundamentals remain bearish. Persistent warmth continues to cap demand, and without stronger LNG flows or a supply disruption, any rallies may be short-lived.
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