Amid a volatile month for global stock markets, U.S. natural gas prices have trended downward. The Henry Hub spot price fell from $4.05 per MMBtu on April 2 to $3.43 per MMBtu by April 9. Futures also followed suit, with the 12-month strip (May 2025–April 2026) dropping 29 cents to an average of $4.267 per MMBtu.

Domestic Demand  

Cooler temperatures across the central U.S. last week drove a 9 percent increase in natural gas consumption compared to the previous week. On a year-over-year basis, demand is up five percent, with the U.S. averaging 108.8 billion cubic feet (Bcf) per day. The power generation sector led this growth, rising five percent from last year to 30.3 Bcf per day.

While weather remains a major influence on demand, the growing reliance on natural gas for electricity generation is becoming increasingly significant. According to a recent report from the U.S. Energy Information Administration (EIA), 2024 set new records for natural gas usage during both winter and summer. The electric power sector alone accounted for 41 percent of total natural gas consumption last year—a four percent increase over the previous year.

International Demand  

The U.S. is currently the leading exporter of liquefied natural gas (LNG) and is expected to continue its growth in this sector. The U.S. Energy Information Administration's Short-Term Energy Outlook (STEO) initially projected a 19 percent increase in LNG exports, predicting that they would reach 14.2 billion cubic feet per day (Bcf/d) by 2025. This projection includes a further 15 percent increase to 16.4 Bcf/d in 2026. However, with the upcoming launch of two new LNG export facilities—Plaquemines LNG Phase 2, which will have 18 midscale trains, and Golden Pass LNG—the actual growth is likely to exceed these projections.

Production & Supply

While natural gas storage has increased by 3.2 percent from the week of April 3rd , it remains below last year’s levels and the five-year average. Due to the impact of colder winter weather, storage levels are currently 19.7 percent (450 Bcf) lower than last year and 2.1 percent (40 Bcf) below the five-year average.

The natural gas rig count fell by seven rigs, or 6.8 percent, during the week of March 27th. This decline appears more notable compared to recent changes in the rig count and could be due to reduced natural gas prices and increased market uncertainty. As a result, producers are scaling back their drilling activities. Due to market volatility, producers have significantly reduced the number of active rigs, resulting in a total that is 12.7 percent, or 30 rigs, lower than it was last year.

If you have any questions about the information in this newsletter or would like to talk to someone about your natural gas, please call your sales representative. 

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