HomeNewsU.S. natural gas prices hit more than 2-yr high on record LNG exports, supply concerns

U.S. natural gas prices hit more than 2-yr high on record LNG exports, supply concerns

3/10/2025

U.S. natural gas prices hit their highest level in more than two years on Monday, supported by record flows to liquefied natural gas (LNG) export facilities and supply concerns ahead of the summer season.

Front-month gas futures for April delivery on the New York Mercantile Exchange were up 7.1 cents, or 1.6%, at $4.47 per million British thermal units (MMBtu) as of 10:03 a.m. EDT (1403 GMT), after hitting their highest level since December of 2022 earlier in the session.

"The market's now reacting to tightness in supply as well as the additional potential risk of tariffs on the products ... threats from Canada really caused kind of a big surge in prices and it's keeping the market on edge right now," said Phil Flynn, an analyst at Price Futures Group. "There are a lot of weather forecasts that are looking at the upcoming summer and expect it to be warmer than usual, which is going to keep inventories very tight."

Gas prices rose more than 14% last week on record flows to LNG plants and worries Canada would reduce power and gas exports to the U.S. after U.S. President Donald Trump imposed tariffs on Canada and Mexico on March 4. Trump later said the two trading partners would not have to pay tariffs until early April on any goods that fell under the United States-Mexico-Canada Agreement.

In 2024, Canada supplied about 8% of total U.S. gas demand, including exports, and about 1% of total U.S. power demand, again including exports. Some of those power and gas exports returned to Canada.

In the import market, Canadian gas exports to the U.S. have dropped to an average of 8.7 Bft3d over the past few days since Trump's tariffs were imposed, down from an average of 9.8 Bft3d during the prior 11-day period from February 21 to March 3, according to LSEG data.

That compares with an average of 8.6 Bft3d of Canadian gas exports to the U.S. in 2024 and 7.6 Bft3d over the prior five years (2019–2023).

The amount of gas flowing to the eight big U.S. LNG export plants has risen to an average of 15.7 Bft3d so far in March, up from a record 15.6 Bft3d in February, as new units at Venture Global's 3.2-Bft3d Plaquemines LNG export plant under construction in Louisiana enter service.

Financial firm LSEG said average gas output in the Lower 48 U.S. states has risen to 105.9 Bft3d so far in March, up from a record 105.1 Bft3d in February.

The U.S. Energy Information Administration (EIA) last week said energy firms pulled 80 Bft3 of gas out of storage during the week ended February 28.

LSEG forecast average gas demand in the Lower 48, including exports, will fall from 110.5 Bft3d this week to 106.7 Bft3d next week.

Dutch and British wholesale gas prices rose rebounding from lows late last week, on forecasts of lower temperatures and as Russian forces intensified attacks on Ukraine.

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