Natural Gas Update February 24,2026

Overview

Natural Gas--April NG is down 4.2 cents at $2.879
NG futures are lower again today after reversing course yesterday from a very strong opening Sunday evening to end the day lower.

The strength in the European weather model seen over the weekend was dialed back in the following 2 weather forecast runs, hence the NG market retreated. Today, heating demand keeps diminishing as the latest GFS run confirms warmer weather in the 6-10 day period.  The Heating Degree Days count for the 6-10 day period in the Lower 48 US states fell by about 17 since the last run, now at 85 HDD. This is about 9 HDD below normal for this time of year. (Market News)

The EIA gas storage data due this week is seen as a draw of 34 BCF to 54 BCF. NGI says that this week's draw could be the 2nd smallest for February since 2010. Last year's draw for the period was 252 BCF and the 5 year average draw is 152 BCF. So this week's data will see the deficit to last year turn into a surplus. The low withdrawal expected this week is said to be due to the warmer temperatures across the Lower 48 last week. (NGI) Dry natural gas production in the Lower 48 averaged 110.2 BCF/d last week, up from 109.3 BCF/d the week before, as per Wood Mackenzie data.

Financial firm LSEG said average gas output in the Lower 48 states has climbed to 108.7 BCF/d so far in February, up from 106.3 BCF/d in January. That compares with a monthly record high of 109.7 BCF/d in December.

LNG feedgas volume in February is on track to set a record, having risen to 18.6 BCF/d, thus beating December's record by 0.1 BCF/d. January saw average feedgas volume of 17.8 BCF/d. The LNG feedgas volume is seen rising further in the coming week's as Exxon's Golden Pass facility is expected to ramp up further.

The Desk's weekly survey for end of March (EOS) gas in storage rose by 42 BCF to 1.790 TCF. The EIA in its monthly STEO this month projects EOS at 1.866 TCF. The Desk's weekly survey for EOS in October of this year rose by 41 BCF to 3.821 TCF. This compares to the EIA's forecast of 3.988 TCF. 

In the Asian LNG market, the Asian spot price slipped to $10.60 per million British thermal units (mmBtu) in the week ended February 20, down from $10.65 previously, and also down 8.6% from the high so far this year of $11.60, reached in the week to January 30. The current spot price is for April delivery cargoes, and therefore reflects the softer demand expected in the shoulder season. The price "slipped' due to robust growth in supply, especially from the United States, and also by muted demand for spot cargoes from China, the world's biggest LNG buyer. China's imports dropped to a forecast 3.38 million tons in February, the lowest monthly total in Kpler data since April 2018 and down from 4.47 million (-15% ) in February last year. Effectively China has been shunning spot cargoes with the bulk of imports being delivered under long-term contracts. This is partly because of the mild winter across much of China reducing LNG demand and because the spot price is not competitive with the domestic price in China, which sit below $10.    (Reuters)

The absence of China in spot LNG markets has allowed Europe to increase imports to meet winter demand, with Kpler forecasting record arrivals of 14.20 million tons in February, besting January's record and up 22% from a year ago. The US is supplying 57% of the LNG imports into Europe as per Kpler data. Russian LNG is still arriving in Europe. Russia is still the continent's second-biggest supplier. The bottom line conclusion from a Reuters analyst regarding the global LNG market is as follows:" The increase in U.S. exports is likely enough to maintain the current equilibrium in global LNG markets, where strong demand in Europe and steady imports in Asia are offset by sufficient supply growth."

The March LN/NG options expire today. The $3.00 strike has a total of over 71,000 contracts open as per Monday's open interest data on the CME. We wonder if this will act as a magnet for the March futures settlement today.

Technically the April NG futures have reverted to a neutral momentum condition due to the pullback seen the past 24 hours. Today, the April contract has reached into the gap on the daily chart from a little over one month ago. The gap created then went from 2.867 to 2.766. There is support at 2.793-2.804, above the closing of the gap. Resistance is likely at 3.020-3.023 and then at 3.130-3.135.

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