U.S. Gas Drops on Storage Build, Permian Bottlenecks Keep Waha Negative
U.S. natural gas prices have dropped to a seven-month low after a larger-than-expected storage build, with weak demand and ongoing Permian pipeline constraints continuing to pressure the market.
(Reuters) — U.S. natural gas futures eased to a fresh seven-month low on April 9 on a slightly bigger-than-expected storage build last week and forecasts for milder weather and lower demand next week than previously expected.
The U.S. Energy Information Administration said energy firms added 50 billion cubic feet of gas into storage during the week ended April 3. Analysts said mild weather kept gas demand for heating low last week.
The injection was slightly bigger than the 46-bcf build that analysts forecast in a Reuters poll and compares with increases of 53 bcf during the same week last year and a five-year (2021-2025) average increase of 13 bcf for the period.
Front-month gas futures for May delivery on the New York Mercantile Exchange fell 1.3 cents, or 0.5%, to $2.711 per million British thermal units (MMBtu), putting the contract on track for its lowest close since August 25.
That small decline came despite a bullish fall in daily output in recent days and an 8% jump in oil futures on worries about the fragile ceasefire in the U.S.-Israeli war with Iran.
In the cash market, average prices at the Waha Hub in West Texas remained in negative territory for a record 44 days in a row as pipeline constraints continued to trap gas in the Permian region, the nation's biggest oil-producing shale basin.
Daily Waha prices first averaged below zero in 2019. They did so 17 times in 2019, six times in 2020, once in 2023, 49 times in 2024, 39 times in 2025, and a record 53 times so far this year.
Waha prices have averaged a negative $1.37 per MMBtu so far in 2026, compared with a positive $1.15 in 2025 and a positive $2.88 over the past five years (2021-2025).
Supply and Demand
Financial firm LSEG said average gas output in the U.S. Lower 48 states has risen to 111.1 billion cubic feet per day so far in April, up from 110.4 billion cubic feet per day in March. That reading compares with a monthly record high of 110.7 billion cubic feet per day in December 2025.
On a daily basis, output was on track to drop by 2.9 billion cubic feet per day over the past three days to a preliminary two-week low of 109.2 billion cubic feet per day on Thursday due mostly to reductions in Wyoming and Texas. Preliminary data, however, is often revised later in the day.
Meteorologists forecast the weather will remain mostly warmer than normal through April 24, keeping both heating and cooling demand low.
LSEG projected average gas demand in the Lower 48 states, including exports, would fall from 108.1 billion cubic feet per day this week to 100.1 billion cubic feet per day next week. The forecast for next week was lower than LSEG's outlook on Wednesday.
Average gas flows to the nine big U.S. LNG export plants have risen to 18.9 billion cubic feet per day so far in April, up from 18.6 billion cubic feet per day in March. That reading compares with a monthly record high of 18.7 billion cubic feet per day in February.