By Ketki Saxena
Investing.com -- As of 2:10 p.m ET, Natural Gas futures were trading at $5.354, or down 3.32% so far today.
Natural gas futures continued to remain volatile with April contracts are set to expire today, and May becoming the first month from tomorrow. Natgas is also being driven lower by expectations of a relatively mild spring across most of North America.
Despite lowered domestic demand on the forecast of warmer weather, fundamentals remain robust as U.S LNG remains in high demand internationally.
U.S. LNG is much-needed by Europe as it seeks to reduce its reliance on Russian gas. Europe now plans to import an additional 1.5 Bcf/d. of LNG to EU countries in 2022. Despite apparent progress in Russia-Ukraine ceasefire talks, Russia has refused to back down from its demand that the EU, amongst other unfriendly countries, pay for Russian gas in the Ruble. Putin is expecting proposals from EU nations by Thursday, March 31st.
While demand for U.S. natural gas continues to soar, production remains flat, and stockpiles are well below the 5-year average.
As per Bloomberg, U.S. natural gas production has held flat at around 95 Bcf for the past week. Output has been difficult to amp up for a host of reasons including maintenance work, low supplies of associated gas, a byproduct of oil necessary for natural gas production, and the overall reluctance of producers to invest in growth.
Both U.S. and Canadian producers have been disincentivized by an unfriendly regulatory environment, and have focused on paying down debt, repaying investors, and investing in renewables and EFTs rather than increasing output for fossil fuels in planned obsolescence by the Canadian and U.S. governments.
U.S. Natural Gas Sstockpiles, meanwhile, are at 1,389 Bcf for the week ended March 18, well below the five-year average of 1,682 Bcf, as noted by Natural Gas Intelligence.