U.S. Natural Gas Futures Rise 6% on Demand Forecasts, Iran Supply Risks
U.S. natural gas futures climbed 6% to a three-week high as stronger demand forecasts and escalating Iran tensions pushed global energy prices higher.
(Reuters) — U.S. natural gas futures climbed about 6% to a three-week high on March 6 on forecasts for more demand over the next two weeks than previously expected and on soaring global energy prices and supply concerns as the U.S.-Iran war escalated.
Front-month gas futures for April delivery on the New York Mercantile Exchange rose 18.3 cents, or 6.1%, to settle at $3.186 per million British thermal units (MMBtu), their highest close since Feb. 13.
Even though the shutdown of liquefied natural gas (LNG) export production in Qatar removed about 20% of global LNG supplies, prices in the U.S. have not reacted as much as elsewhere because the country was already exporting all the LNG it could produce. So, no matter how high global gas prices go, the U.S. cannot export much more gas.
U.S. gas was up about 11% this week versus 54% in Europe.
In the cash market, average prices at the Waha Hub in West Texas remained in negative territory for a record 21st day in a row, as pipeline constraints trapped gas in the nation's biggest oil-producing basin.
In Arizona, meanwhile, next-day power prices at the Palo Verde hub fell to $3.45 per megawatt-hour (MWh), its lowest since hitting a record low of 35 cents in May 2024.
That compares with averages of $24.26 per MWh so far in 2026, $34.82 in 2025, and $59.94 over the past five years (2021-2025).
Supply and Demand
Average gas output in the U.S. Lower 48 states rose to 109.8 billion cubic feet per day (billion cubic feet per day) so far in March, up from 109.2 billion cubic feet per day in February, according to data from financial firm LSEG. That compares with a monthly record high of 110.6 billion cubic feet per day in December 2025.
Energy analysts said mostly mild weather this week likely allowed energy firms to leave more gas in storage than usual, which should keep stockpiles about 2% below normal for the week ended March 6, the same as the week ended Feb. 27.
Meteorologists forecast weather across the country will remain mostly warmer than normal through March 21, which should keep heating demand and the amount of gas energy firms need to pull from storage low in coming weeks. The weather, however, is still expected to be a little cooler in two weeks than next week.
LSEG projected average gas demand in the Lower 48 states, including exports, would drop from 123.9 billion cubic feet per day this week to 113.0 billion cubic feet per day next week with milder weather before climbing to 120.9 billion cubic feet per day in two weeks with cooler weather. The forecast for next week was higher than LSEG's outlook on March 5.
Average gas flows to the nine big U.S. LNG export plants slid to 18.1 billion cubic feet per day so far in March, down from a record 18.7 billion cubic feet per day in February.
In the Middle East, QatarEnergy halted LNG production and declared a force majeure due to the Iran war, causing global gas prices to soar. Qatar is one of the biggest LNG producers in the world along with the U.S. and Australia.
Gas traded near $18 per MMBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and near $16 at the Japan-Korea Marker (JKM) benchmark in Asia.