Natural Gas Prices Hit Two-Month Low Due to Increased Output and Warm Weather
New York, Friday, 18 April 2025.
U.S. natural gas futures have dropped below $3.3/MMBtu, attributed to rising production and mild weather forecasts, reducing heating demand. This decline impacts energy markets reliant on natural gas.
Factors Driving the Price Decline
The current downturn in U.S. natural gas prices, which fell below $3.3/MMBtu, is largely driven by increased production outputs alongside forecasts of persistently mild weather. In April, average daily gas output in the contiguous United States rose to 106.3 billion cubic feet (BCF), surpassing March’s previous monthly high of 106.2 BCF. A new record production was set with a daily high of 107.4 BCF over the weekend, indicating the nation’s robust capacity to extract natural gas at unprecedented rates [1].
Weather Impacting Demand
Contributing to the pricing pressure is the forecast of warmer-than-usual temperatures extending through the end of April. This weather pattern reduces the demand for heating, thus lessening the immediate demand for natural gas, traditionally used to fuel residential and commercial heating systems. The forecasts predict continued warmth, thereby maintaining low natural gas consumption rates [1].
Economic Implications
The reduction in natural gas prices has far-reaching implications for various sectors reliant on this energy source. As approximately 25% of U.S. energy consumption derives from natural gas, price fluctuations can impact electricity generation costs and production expenses in industries ranging from manufacturing to logistics [1][2]. Lower prices benefit consumers but could pressure gas producers’ margins, challenging smaller operators unable to sustain profitability at decreased price points [3].
LNG Exports and Market Dynamics
Despite declining domestic prices, exports of liquefied natural gas (LNG) remain on the rise. Facilities like Venture Global’s Plaquemines in Louisiana have increased throughput, contributing to a record flow of 16.3 BCF of LNG per day for export, reflecting robust international demand. These contrasting market dynamics underline the global interdependencies of energy trading, where domestic price decreases do not necessarily correlate with reduced international prices or requirements [1][3].