U.S. Natural Gas Prices Tank on Inventory Build, Lower Demand

U.S. natural gas prices fell on Thursday after the EIA reported a larger-than-expected inventory build coupled with forecasts for milder weather and less demand next week. Natural gas futures were down 4.6% to trade at $4.05/MMBtu at 11.00 am ET, reversing the multi-year high of $4.35/MMBtu they reached on March 10. U.S. utilities added 9 billion cubic feet of gas to storage for the week ending March 14, way higher than the forecast of 3 billion cubic feet. This marked the first inventory increase since November 2024, cutting the storage deficit. U.S. gas inventories are 26.8% lower compared to a year ago and 10% below the five-year average.

The recent surge in gas prices came in early March after U.S. LNG exports hit a record 15.7 bcfd, boosted by new units at Venture Global’s (NYSE:VG) Plaquemines plant. The Arlington, Virginia-based LNG exporter commenced LNG production at its Plaquemines LNG plant 30 months after the final investment decision (FID) was made, making the plant with a 20 mtpa nameplate capacity one of the two fastest greenfield projects to reach first production. Once fully operational, Plaquemines will be among the largest LNG facilities in the world, featuring 36 electrically-driven 0.626 million tonnes per annum (mtpa) liquefaction trains, configured in eighteen blocks.

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“Reaching first LNG at Plaquemines at this pace will enable the United States to remain the top exporter of LNG in the world. Between current and planned facilities, Venture Global is prepared to invest $50 billion in energy projects based in the United States which will create jobs, support local economies, strengthen the balance of trade and unleash much needed US LNG supply to our allies,” remarked Venture Global CEO and Co-Founder, Mike Sabel.

The U.S. is rapidly developing LNG plants to meet Europe’s surging demand for the commodity. Two weeks ago, Cheniere Energy for the first time started producing liquefied natural gas (LNG) from the first train (Train 1) of its Corpus Christi Stage 3 Liquefaction Project. As of Nov. 30, the overall project completion for the project was close to 76%; however, the company expects substantial completion achieved at the end of the first quarter of 2025. The project consists of seven midscale trains, projected to produce over 10 million tonnes per annum (mtpa) of LNG.

By Alex Kimani for Oilprice.com

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