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How is Weather Pressure Impacting Prices?
Warm temperatures are dominating most of the U.S. this week, with highs in the 60s to 80s across the West, South, and East. A brief cold front will move through the Midwest and East early in the week, but overall demand is expected to remain low to moderate. Forecasts from the Commodity Weather Group suggest this trend could persist into late April, sapping heating-related consumption and setting the stage for stronger inventory builds. This has undermined bullish momentum, with futures hitting a 2.5-month low on Wednesday.
What Are the Expectations for Today’s EIA Storage Report?
Consensus points to a 24–26 Bcf injection into storage for the week ending April 12. While this is below the five-year average build of around 50 Bcf for this period, it still reflects the beginning of a seasonal trend toward inventory replenishment. Last week’s 57 Bcf injection already marked a sharp shift from winter drawdowns. As of April 4, storage was down 19.8% year-over-year and 2.1% below the five-year average, indicating tightness — but warmer weather is quickly closing the gap.
Are Supply and Demand Fundamentals Offering Support?
Dry gas production remains robust at 105.2 Bcf/d, up 5.2 Bcf from last year. Domestic demand has climbed to 73.7 Bcf/d, up 10.9% year-over-year, but LNG export volumes slipped to 15.6 Bcf/d, down 6.4% from the prior week. Rising U.S. electricity output — up 6.4% year-over-year for the week ending April 12 — is a slight tailwind for natural gas demand, though not enough to outweigh the bearish weather. Traders are also watching developments around U.S. LNG export policy, with future infrastructure approvals potentially boosting long-term demand.
Will Prices Break Below Key Support Levels?
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