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- Natural Gas Update March 27,2026
March 27, 2026
Overview
Natural Gas--May NG is up 9.4 cents at $3.022
NG futures are higher boosted by the bullish EIA storage data seen yesterday and the ongoing supply concerns raised by the Iran conflict. Additionally a tropical cyclone disrupting Australian supply is supportive.
Yesterday's EIA gas storage data was bullish with a draw of 54 BCF, which was more than any forecasted number we saw. This is the presumed last withdrawal for the season. Total storage fell to 1.829 TCF. This is +14 BCF / +0.77% versus the 5 year average. The total is +90 BCF/+5.18% versus last year's level.
For the LNG market, supply risks have intensified after a tropical cyclone forced production cuts at three Australian LNG plants, together accounting for around 8% of global supply. (ING) All major LNG export terminals in Western Australia have halted operations and cleared all vessels from their berths as the cyclone intensifies, according to Kpler. Woodside Energy has fully demobilized its offshore platforms and floating production units. This is in addition to the shutdown of Qatar’s largest liquefaction facility. One analyst said that between the disruption from Qatar and now the cyclone hitting Australia, more than a quarter of global LNG supply was currently affected. This will exacerbate gas market tightness in Asia and Europe, especially if it takes more than a matter of days to normalise Australian production levels again," he added. (Reuters)
Yet, Thursday, TotalEnergies’ CEO said that his firm will honor all LNG contracts in volume and price despite the Qatar outages, per Reuters. Total’s portfolio is large enough to meet all contracted volumes despite the shortage of gas coming out of the Middle East.
Japan's industry ministry will relax rules for one year to increase the use of coal-fired power plants in the fiscal year starting April, given the sharp increase in the price of LNG due to the Iran war. LNG consumption could then fall by about 0.5 million tons a year, or slightly more than 10% of the LNG it imports via the Strait of Hormuz, according to a METI's estimate. Japan takes delivery of some 4 million metric tons of LNG annually - or around 6% of its total imports - via the Strait of Hormuz. "This is strictly a short-term adjustment and does not alter our long-term decarbonization policy," a Japanese ministry official said. Japan has been restarting nuclear power plants to assist with power generation. (Reuters)
Yesterday's options activity saw the October January -$2.50/ -$2.00 put spread trade 8,000 contracts worth at 8.6 cents. CME open interest data shows the -$2.50 put being a new position versus the closing of the -$2.00 puts. Also in the October January CSO, the -75 /-50 cent calls spread traded 1.8 cents 2,000 lots worth. The -75 cent call was an opening position, as per CME data. The -75 cent call also traded 2.7 cents cost against 0.1 delta buys of the January versus selling October at a differential of $1.685. In the October November CSO, the -40/-50 cent put spread traded 3.0 cents 3,000 lots worth. The -40 cent option trade was an opening position. 6,000 contracts of the September October flat call option traded 2.2 cents---with much of that trade being an opening position.
Today is the last trading session for the April NG futures.
Technically, the May NG futures have momentum that looks poised to turn positive basis the daily chart. Resistance lies at 3.090-3.096 and then at 3.134-3.136. Support comes in at 2.934-2.936 and then at 2.891-2.893.
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