With predictions of colder weather and higher heating demand over the next two weeks, natural gas saw a significant spike of 2.46% yesterday, closing at 141.7. This change in weather forecasts helped to boost market confidence, as did a persistent decline in U.S. output after petrol prices fell to a 3-1/2-year low in February.
Due to ample supply and mild weather, prices significantly accumulated gas storage in February, surpassing heating demand, and fell to $1.511 per mmBtu, the lowest since June 2020. The U.S. Energy Information Administration (EIA) reports that despite the recent lows, projections for record-high U.S. petrol consumption in 2024 have arisen; however, this has resulted in a decline in production for the first time since 2020.
The average daily production of petrol in the Lower 48 states of the United States decreased to 100.3 bcfd in March from 104.1 bcfd in February. The Lower 48 states are expected to experience colder-than-normal temperatures through March 25.
From that point until April 2, the weather is predicted to move towards near- to warmer-than-normal temperatures. The financial firm LSEG predicts that for the following week, petrol consumption in the Lower 48 states including exports will remain stable at roughly 113.5 bcfd, notwithstanding these changes.
