As we close the door on the heating season this year, the U.S. has an above-average level of natural gas in storage due to prolonged warmer-than-normal temperatures this past winter.  This has set downward pressure on prices and impacted future supply as producers pull back on production.  

Domestic Demand

During the 2022-23 heating season, net withdrawals of natural gas from underground storage facilities were at their lowest since 2015-16. Gas production increased to 5.2 billion cubic feet per day (Bcf/d), a 5.5 percent increase compared to last year.

S&P Global Commodity Insights reported that the total consumption of natural gas in the United States fell by 5.7 percent compared to the previous week. The residential and commercial sectors saw a significant decline of 17.0 percent, while natural gas consumed in the industrial sector decreased by 0.7 percent.  

International Demand  

During this week, international natural gas futures prices increased, with a rise in weekly average front-month futures prices for LNG (Liquefied Natural Gas) cargoes in East Asia and natural gas futures for delivery at TTF (Title Transfer Facility) in the Netherlands. Bloomberg Finance, L.P. reported that the weekly average for LNG cargoes in East Asia rose to $12.96/MMBtu, and TTF's weekly average rose to $14.96/MMBtu. However, these prices were significantly lower than the prices for the same week last year.

Production & Supply  

Last week, the average total natural gas supply in the U.S. remained steady at 105.3 Bcf/d, a three percent increase from last year.  While natural gas rigs are 12.1 percent above last year, we’re starting to see a slight decline week to week with 158 rigs in operation.  

Working gas in underground storage continues to remain strong, with 1,855 Bcf in storage.  Compared to last year, the U.S. has 33 percent more natural gas in storage and 18.9 percent more than the five-year average.  

The EIA (Energy Information Administration) released a recap of natural gas production in 2022 and found that the Appalachia region produced the most natural gas in the U.S., accounting for 29 percent of gross natural gas withdrawals. Still, its production growth has slowed due to insufficient pipeline takeaway capacity. The Permian region is the second-largest natural gas-producing region and experienced growth in natural gas withdrawals due to oil-directed drilling. The Haynesville region in Louisiana and Texas and the Eagle Ford region in Texas also saw growth in natural gas withdrawals, with the former benefiting from its proximity to the Gulf Coast and growing demand for natural gas from liquefied natural gas export terminals and industrial facilities.

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