Natural Gas Update March 11,2026

Overview

Natural Gas--NG is up 8.2 cents at $3.102
NG futures are higher as in a few days the weather will pivot to stronger heating demand. NG prices are higher today even as yesterday's EIA STEO forecasts painted a slightly negative picture for NG prices and suggested record NG production is forthcoming. The ongoing threat to global LNG supply due to the Iran conflict is also cited as giving NG futures a boost, as per NGI commentary.

U.S. natural gas output will rise to a record high in 2026, while demand will decline, the EIA said in its monthly STEO on Tuesday. The rise in crude oil production will bring with it associated natural gas production. The EIA projected dry gas production will rise from a record 107.7 BCF/d in 2025 to 109.5 BCF/d in 2026 and 112.3 BCF/d in 2027. Demand will fall from a record 91.9 BCF/d in 2025 to 91.4 BCF/d in 2026 before rising to 92.1 BCF/d in 2027. The EIA lowered their NG price forecasts for 2026 and 2027. The Henry Hub average price for 2026 was lowered by 55 cents from last month's forecast to $3.76. The 2027 average price forecast for US NG was lowered from last month by 53 cents to $3.85. The EIA also wrote :" Although reduced LNG flows through the Strait of Hormuz have caused the price of natural gas in Europe and Asia to increase, we expect U.S. natural gas prices to be relatively unaffected by this development."  The EIA projects end of March 2026 gas in storage to be 1.842 TCF; this is down 24 BCF from last month's projection. The EIA's forecast compares to the Desk's survey forecast for end March 2026 inventories to be 1.835 TCF. The EIA sees end October 2026 gas in storage to be 3.971 TCF. That is down 17 BCF from their projection seen last month and compares to the Desk's survey of 3.889 TCF.

Celsius Energy highlights the fact that the NG power burn share has risen of late and is strong versus 2025 power burns. Celsius says that NG's share of "fossil fuel consumption" is now consistently up 5%-7% vs 2025. If this continues, it will support powerburn demand in the Shoulder & Cooling Seasons, they opine.

Notable from Tuesday's LN options trading on the CME was the October November CSO minus 20 cent call open interest falling by 2,900 contracts. The call was bought against selling of the  minus 50 cent put at a cost of 0.5 cents. The October November futures spread settled Tuesday at -28.7 cents. In the July October CSO, the flat call traded 0.8 cents. This was a closing trade. The July October futures spread settled Tuesday at minus 13.3 cents. The October January CSO minus 50 cent/minus 75 cent call spread traded in size at 2.9 cents cost to the minus 75 cent call buyer. The October January futures spread settled Tuesday at -$1.402. The March April 2027 $2.00 call CSO traded 2,100 times at a cost of 18 cents. The March April 2027 futures spread settled Tuesday at  31.3 cents.

Technically the April NG daily chart has positive momentum, although prices look to be rangebound. Support for the spot NG futures lies at 2.998-3.000 and then at 2.910-2.912. Resistance comes in at 3.188-3.190 and then at 3.280.

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