U.S. Natural Gas Futures Rebound from 17-Month Low as Global Prices Surge

U.S. natural gas futures rebounded from a 17-month low as global LNG prices surged, but domestic fundamentals remain weak. Permian pipeline constraints continue to push Waha Hub prices into negative territory, while limited LNG export capacity caps the U.S. response to global supply disruptions.

(Reuters) — U.S. natural gas futures rose about 2% on April 13, rebounding from a 17-month low in the prior session as global energy prices climbed amid escalating geopolitical tensions. 

 

Front-month May futures on the New York Mercantile Exchange settled at $2.708/MMBtu, up 6 cents on the day, despite continued pressure from strong domestic supply and weak seasonal demand.

Production in the Lower 48 states averaged 111.1 Bcfd so far in April, according to LSEG, near record levels and above March output. At the same time, mild spring weather has reduced both heating and cooling demand, allowing storage inventories to build to an estimated 5.3% above normal levels.

In West Texas, prices at the Waha Hub remained in negative territory for a record 46 consecutive days, underscoring ongoing pipeline takeaway constraints in the Permian basin. Limited infrastructure capacity continues to trap associated gas production, weighing on regional pricing.

While global gas and LNG prices have surged following supply disruptions tied to the Iran conflict, U.S. prices have lagged due to structural export limits. Feedgas flows to the country’s nine major LNG export facilities averaged 18.9 Bcfd in April, near capacity and only modestly above March levels.

With LNG terminals operating near full utilization, the U.S. has limited ability to capitalize on higher global prices, leaving domestic market fundamentals—high output, ample storage and constrained takeaway capacity—as the primary drivers of pricing.