U.S. natural gas futures declined sharply in Monday morning trading, with the front-month March contract falling approximately 22 cents to trade near $3.20 per million British thermal units. The move represented a drop of more than 6% as updated weather models indicated warmer conditions across much of the continental United States through late February.
The market's focus has shifted to heating demand calculations and storage dynamics. A milder second half of February would reduce withdrawals from inventories, potentially easing supply concerns that emerged after a significant winter draw. Last week, the Energy Information Administration reported a record withdrawal of 360 billion cubic feet for the week ending January 30.
Production in the Lower 48 states has averaged approximately 106.9 billion cubic feet per day so far in February, according to LSEG data. Projected demand, including exports, is expected to decline from about 159.5 bcf/d this week to 141.4 bcf/d next week, then to 132.6 bcf/d in the following week. Feedgas flows to major U.S. LNG export facilities have averaged roughly 18.5 bcf/d this month.
Equities tied to natural gas production moved lower in sympathy with the commodity price decline. EQT Corporation shares fell about 1.2% during morning trading. Antero Resources and Range Resources declined approximately 0.5% and 1.1%, respectively. Coterra Energy, which has greater exposure to oil markets, edged slightly higher.
Market participants are now awaiting Thursday's weekly EIA storage report, scheduled for February 12, along with updated temperature outlooks that will shape demand expectations for the remainder of the month. The March futures contract settled at $3.422 on Friday, completing a week that saw prices fall about 21% after a 17% decline the previous week.
Traders are monitoring whether futures can maintain support above the $3 level, which has attracted buying interest during recent selloffs. The market remains sensitive to sudden shifts in weather forecasts or unexpected production disruptions, particularly with LNG export volumes continuing near recent highs.
