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At 12:13 GMT, Natural Gas Futures are trading $3.348, down $0.038 or -1.12%.
Is Mild Weather Undercutting Demand Expectations?
Short-term fundamentals remain bearish. National weather forecasts for April 28–May 3 point to widespread mild temperatures in the 60s–80s, limiting both heating and cooling demand. The southern U.S. may see pockets of lower 90s, but overall demand is expected to remain light.
This aligns with weak consumption data: lower-48 gas demand on Tuesday registered 65.7 Bcf/d, down 2.7% year-over-year. With comfortable spring conditions and soft residential-commercial demand, upside momentum may stall without a clear weather-driven catalyst.
Do Storage Builds Signal Further Downside Risk?
Last Thursday’s EIA report added to the bearish sentiment, showing a +88 Bcf inventory build for the week ended April 18—well above the five-year average of +58 Bcf and topping consensus estimates of +75 Bcf. While total inventories remain 2.3% below the five-year norm and 20.2% below last year’s levels, continued large injections in May could erode concerns about summer supply tightness. Traders will closely watch this week’s report for signs of whether bearish storage trends continue.
How Are Exports and Production Offsetting Weak Domestic Demand?
Some structural demand tailwinds remain intact. LNG feedgas flows rose 1.5% week-over-week to 15.8 Bcf/d, while U.S. electricity output rose 2.1% y/y last week, signaling utility demand may offset some residential softness.
Dry gas production is running strong at 105.6 Bcf/d (+5.8% y/y), but the modest rise in rig counts suggests supply growth may be leveling off. Policy-wise, the potential for expanded LNG export capacity—following the rollback of the Biden-era pause—offers longer-term bullish support.
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