April Nymex natural gas prices surged 3.20% on Friday, closing at $3.07 per MMBtu, driven by colder weather forecasts that could increase heating demand. The Commodity Weather Group indicated a shift to cooler temperatures, although above-average warmth is still expected across much of the U.S. Additionally, the expiration of the April contract prompted short-covering, further elevating prices.
This price increase comes amid tightening global LNG supplies, particularly following significant damage reported at Qatar’s Ras Laffan Industrial City, which accounts for 20% of global LNG exports. The ongoing geopolitical tensions, including the closure of the Strait of Hormuz, have also disrupted supplies to Europe and Asia. While U.S. natural gas production remains robust, with a year-on-year increase of 5.2%, the combination of reduced global capacity and rising domestic demand could sustain upward pressure on prices.
Market professionals should note that while current inventory levels are above seasonal averages, the potential for increased U.S. LNG exports could create a more favorable pricing environment in the near term.
Source: nasdaq.com