Front-month gas futures for April delivery on the New York Mercantile Exchange were up 9.7 cents, or 2.3%, to settle at $4.399 per million British thermal units (mmBtu). The contract is up 14.1% for the week, marking its biggest weekly gain since January.
“We’re getting a burst of cold weather late in the season, raising concerns about supply buildup ahead of summer’s cooling demand,” said Phil Flynn, an analyst at Price Futures Group.
“Despite the current chill, forecasts suggest an unusually hot summer and better-than-expected demand for LNG exports, keeping the longer-term outlook bullish.”
The tariff situation adds uncertainty, with a potential slowdown in Canadian exports to the U.S. making it harder to rebuild storage levels, Flynn added.
Gas prices spiked earlier this week on record flows to liquefied natural gas export (LNG) plants and worries Canada would reduce power and gas exports to the U.S. after U.S. President Donald Trump imposed tariffs on Canada and Mexico on March 4.
In 2024, Canada supplied about 8% of total U.S. gas demand, including exports, and about 1% of total U.S. power demand, again including exports. Some of those power and gas exports returned to Canada.
The U.S. Energy Information Administration (EIA) on Thursday said energy firms pulled 80 billion cubic feet (bcf) of gas out of storage during the week ended February 28.
Extreme cold weather earlier this year forced energy firms to pull massive amounts of gas out of storage, including record amounts in January, leaving current stockpiles about 11.3% below the five-year (2020-2024) normal for this time of year.
SUPPLY AND DEMAND
Average gas output in the Lower 48 U.S. states has risen to 105.8 billion cubic feet per day (bcfd) so far in March, up from a record 105.1 bcfd in February, according to LSEG data.
On a daily basis, however, output was on track to decline by 2.3 bcfd over the past seven days to a preliminary one-week low of 104.6 bcfd on Friday, down from a three-week high of 106.9 bcfd on February 28. That compares with an all-time daily high of 107.2 on February 6.
In the import market, Canadian gas exports to the U.S. have dropped to an average of 8.2 bcfd over the past few days since Trump’s tariffs were imposed, down from an average of 9.8 bcfd during the prior 11-day period from February 21 to March 3, according to LSEG data.
That compares with an average of 8.6 bcfd of Canadian gas exports to the U.S. in 2024 and 7.6 bcfd over the prior five years (2019-2023).
Meteorologists projected weather in the Lower 48 states would turn from mostly warmer than normal from March 6-15 to mostly colder than normal from March 16-21.
LSEG forecast average gas demand in the Lower 48, including exports, will fall from 110.4 bcfd this week to 109.5 bcfd next week. Those forecasts were lower compared to LSEG’s outlook on Thursday.
The amount of gas flowing to the eight big U.S. LNG export plants has risen to an average of 15.7 bcfd so far in March, up from a record 15.6 bcfd in February, as new units at Venture Global’s 3.2-bcfd Plaquemines LNG export plant under construction in Louisiana enter service.
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