The U.S. Energy Information Administration (EIA) reports that the country ended the 2024–2025 winter heating season (November through March) with underground natural gas storage levels at a three-year low. This reduced supply has contributed to upward pressure on natural gas prices, driven by steady domestic and international demand.

Domestic Demand

In the final week of April, average daily U.S. natural gas consumption was 66.1 billion cubic feet (Bcf)—down four percent from the same period last year. Warmer spring temperatures led to a 19 percent drop in demand from the residential and commercial sectors. In contrast, demand for natural gas for power generation rose by three percent, highlighting the continued shift toward gas-fired electricity production.

International Demand

On Tuesday (5/6), the European Union released a plan to phase out its remaining natural gas imports from Russia by the end of 2027. The EU enacted a ban on Russian oil in late 2022 after the invasion of Ukraine.  Since then, the U.S. has been the biggest supplier of liquified natural gas (LNG) to the EU, with 45 percent of their natural gas coming from U.S. producers in 2024. With Europe’s natural gas inventories 33 percent lower than last year, there is continued demand for U.S. LNG in the near term.

While demand for U.S. LNG remains high in Europe, Asia has seen a drop due to ongoing tensions between China and the U.S and slower economic activity in the region. Since early February, China has not imported LNG from the U.S. following tariff disputes. Chinese buyers with long-term contracts with U.S. producers began reselling LNG cargoes to Europe, according to a March report by Bloomberg

Production & Supply

Natural gas storage increased by 107 Bcf, bringing the total to 2,041 Bcf for the week ending April 25. Although this amount is 17 percent (435 Bcf) lower than the same time last year, it is slightly above the five-year average by 0.2 percent (5 Bcf). While the difference may be small, it indicates progress toward rising above the five-year average after several weeks of being below it.

The natural gas rig count increased slightly by one percent from the previous week, bringing the total to 99 rigs. While rig count has risen, it remains 5.7 percent below this time last year.

If you have any questions about the information in this newsletter or would like to talk to someone about your natural gas, please call your sales representative.