Production Is Still Winning the Argument
Lower-48 dry gas production held near record highs around 110 Bcf per day last week. I’ve been watching this number every week waiting for a meaningful pullback and it is not coming. Rig counts are still elevated compared to a year ago. Output keeps replenishing storage faster than demand can draw it down. As long as production stays at these levels every bullish catalyst has to fight through a massive supply cushion before prices can sustain any upside momentum. That is not a setup that rewards aggressive buying.
LNG Exports Let the Bulls Down
Feedgas flows dipped toward 17.7 Bcf per day last week because of seasonal maintenance at Gulf Coast export terminals. That gas stayed in the domestic market instead of leaving the country and traders noticed immediately. LNG export demand has been one of the strongest fundamental supports for U.S. natural gas over the past few years. When those flows slow, even temporarily, the oversupply risk comes back into focus fast. The maintenance window is not permanent but the timing was bad for a market that needed every bullish support it could find.
The Global Picture Has Not Gone Away
Qatar’s Ras Laffan facility is still running at reduced capacity. Seventeen percent of its export operations are offline and repairs are going to take years not months. European and Asian buyers who depended on that supply have to find it somewhere else every single month until the work is done. U.S. export terminals sit directly in that path. The weekly feedgas numbers are not reflecting it cleanly yet but that structural demand pull is building underneath this market whether the domestic storage report acknowledges it or not.
The Strait of Hormuz situation adds another layer. Any sustained disruption to Middle East energy flows forces global buyers to look for replacement supply and U.S. LNG becomes more strategically valuable every week the Strait stays restricted. I’ve watched big structural stories get buried under loud short term numbers before. Right now the weekly storage report is the loud number. When it stops dominating the conversation, the global LNG picture gets a lot more attention.
Weather Helped but Not Enough
Cooler temperatures across parts of the Midwest and East added some late season heating demand early in the week and triggered short covering. That is what late season cold does in this market. It creates just enough excitement to pull in a bid even when the fundamentals do not support it. By midweek it was over. This is the dead zone between heating and cooling demand and the market knows it. Spring doesn’t give natural gas a reason to run. Last week was a reminder of that.
Weekly Outlook
The $2.749 pivot is the level that sets the tone this week. Hold above it and buyers are still in control with a potential breakout over $2.905 putting $3.107 back on the radar. Lose it and $2.592 becomes the next test with the multi-month lows at $2.564 and $2.442 behind it.
Given how long this market has been grinding lower in both price and time, watch for a closing price reversal bottom on any test of that support area. That is a pattern that shows up in weather markets and this is a weather market waiting to happen. One heat forecast that sticks changes this whole setup fast.
