Natural gas prices closed higher on Friday, with May Nymex natural gas (NGK26) rising 1.02% amid forecasts of above-average spring temperatures in the Southeast and Midwest, which are expected to increase demand for cooling. This uptick follows a significant drop earlier in the week, where prices hit a 17-month low due to reduced heating demand and high inventory levels, currently 5.8% above the five-year seasonal average.
The market’s dynamics are further complicated by projections of increased U.S. natural gas production, with the EIA raising its 2026 output forecast. Despite this, medium-term support for prices may stem from tighter global LNG supplies, particularly following damage to Qatar’s Ras Laffan plant, which could impact 20% of global LNG capacity. Additionally, geopolitical tensions affecting the Strait of Hormuz have curtailed supplies to Europe and Asia.
For market professionals, the key takeaway is the delicate balance between rising inventories and production against the backdrop of seasonal demand and geopolitical disruptions, which could create volatility in natural gas pricing in the coming months.
Source: nasdaq.com