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Is Weather-Driven Demand Fading Too Soon?
Mid-April forecasts have shifted warmer across much of the U.S., significantly reducing expectations for lingering heating demand. While brief cold snaps remain possible in parts of the Northeast and Midwest, national consumption has dipped into the moderate-to-low range. With residential and industrial usage staying soft and power burn yet to ramp up in a meaningful way, traders have few demand-side catalysts to support prices.
Production Outpaces Demand Despite Lower Rig Activity
U.S. dry gas production remains elevated even as rig counts decline, with output holding steady around 106.4 Bcf/d—more than 4% higher year-on-year. The disconnect between falling drilling activity and stable production is intensifying the oversupply narrative, particularly as seasonal demand has yet to materialize. Without a weather-related jolt or an uptick in industrial pull, supply continues to outpace current consumption.
Storage Builds Undercut Bullish Sentiment
The latest EIA storage report showed a 29 Bcf injection for the week ending March 28, a stark contrast to the five-year average draw. While inventories remain 4.3% below the five-year average, the early build signals mild weather and ample supply are beginning to refill stockpiles ahead of schedule. This shift in timing has amplified bearish sentiment, with traders anticipating larger-than-normal builds in the coming weeks.
Technical Breakdown Signals Bearish Momentum
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