US Natural Gas Prices Drop Amid Supply Glut

In the US, natural gas prices dropped to around $1.7 per million British thermal units (MMBtu), hitting their lowest point since February 20th. This decrease is mainly because of the country’s weak demand and oversupply. The situation is partly due to the Freeport LNG export facility in Texas, where two out of three liquefaction trains won’t be operational until May. This downtime limits the United States’ capacity to export natural gas, leading to higher domestic supply levels.

Furthermore, natural gas consumption has been relatively low this winter, combined with high gas production, strong hydropower performance, and extensive initial stocks. As a result, by late March, the amount of natural gas stored was over 41% higher than the average of the past five years, as weekly data from the Energy Information Administration (EIA) indicates. For the first time since November, US utilities have started to increase their stockpiles, marking a likely end to the period of using up these inventories.

US Natural Gas Prices Drop Amid Supply Glut