March 26, 2026 — U.S. natural gas futures closed higher after a government report showed a larger-than-anticipated weekly decline in domestic stockpiles, while geopolitical supply disruptions and shifting weather forecasts created competing pressures on the market.
Weekly Storage Data Exceeds Forecasts
The U.S. Energy Information Administration reported that working gas in storage fell by 54 billion cubic feet for the week ended March 20. This drawdown exceeded the median analyst forecast of a 48 bcf decline and was significantly steeper than the five-year average withdrawal of 21 bcf for the week.
April-delivered Nymex natural gas futures settled up 1.59% following the data release. Total inventories stood 4.9% higher than the same time last year and 0.8% above the five-year seasonal average, indicating overall supply remains ample.
Supply Disruptions Provide Underlying Support
Market sentiment has found medium-term support from significant damage at a major global export facility. Qatar reported last week that attacks by Iran caused “extensive damage” at the Ras Laffan Industrial City, the world’s largest natural gas export plant.
The damage affected approximately 17% of the facility’s liquefied natural gas export capacity. Qatar stated repairs could take three to five years. The Ras Laffan plant accounts for roughly 20% of global LNG supply, and reduced capacity could increase demand for U.S. exports.
Further supply constraints stem from the closure of the Strait of Hormuz due to the ongoing war in Iran. This critical shipping lane’s closure has sharply curtailed natural gas supplies to European and Asian markets.
Weather and Production Trends Counter Gains
Price gains were limited by forecasts for warmer U.S. weather, which could reduce heating demand. The Commodity Weather Group indicated on Thursday that forecasts are trending warmer, with above-average temperatures expected across most of the United States through April 3.
Domestic production continues to run at elevated levels. U.S. dry gas production in the lower 48 states was 113.2 billion cubic feet per day on Thursday, a 4.8% increase from the same time last year, according to data from BloombergNEF.
The number of active U.S. natural gas drilling rigs remains high. Baker Hughes reported last Friday that the count fell by 2 to 131 in the week ending March 20, just below a 2.5-year high of 134 rigs recorded in late February.
Conflicting Demand Signals
Demand indicators present a mixed picture. Lower-48 state gas demand was 72.5 bcf per day on Thursday, down 11.4% year-over-year, BNEF data showed. However, estimated LNG net flows to U.S. export terminals rose to 20.1 bcf per day, a 2.4% weekly increase.
Electricity output, a key source of gas demand, showed strength. The Edison Electric Institute reported that U.S. electricity output in the week ended March 21 rose 7.5% year-over-year.
In Europe, gas storage levels were 28% full as of March 24, notably below the five-year seasonal average of 41% full for this time of year, according to industry data.
Market Outlook and Projections
The EIA has raised its forecast for 2026 U.S. dry natural gas production to 109.97 billion cubic feet per day, up from a previous estimate of 108.82 bcf per day issued in February. This projection for higher output typically exerts downward pressure on prices.
Market participants continue to monitor the balance between robust domestic production, volatile export demand linked to global events, and variable weather-driven consumption as the traditional heating season winds down.
For official data and reports, visit the U.S. Energy Information Administration’s natural gas weekly update. Historical storage data is available from the EIA.
This article was produced with AI assistance and reviewed by our editorial team for accuracy and quality.
