US natgas futures up 6% to 3-week high with increased demand and Iran tension

By Scott DiSavino

NEW YORK, March 6 (Reuters) - U.S. natural gas futures climbed about 6% to a three-week high on Friday on forecasts for more demand over the next two weeks than previously expected and on soaring global energy prices and supply concerns as the U.S.-Iran war escalated.

Front-month gas futures for April delivery NGc1 on the New York Mercantile Exchange rose 18.3 cents, or 6.1%, to settle at $3.186 per million British thermal units (mmBtu), their highest close since February 13.

Even though the shutdown of liquefied natural gas (LNG) export production in Qatar removed about 20% of global LNG supplies, prices in the U.S. have not reacted as much as elsewhere because the country was already exporting all the LNG it could produce. So, no matter how high global gas prices go, the U.S. cannot export much more gas.

U.S. gas was up about 11% this week versus 54% in Europe.

In the cash market, average prices at the Waha Hub in West Texas remained in negative territory for a record 21st day in a row, as pipeline constraints trapped gas in the nation's biggest oil-producing basin.

In Arizona, meanwhile, next-day power prices at the Palo Verde hub fell to $3.45 per megawatt-hour (MWh), its lowest since hitting a record low of 35 cents in May 2024.

That compares with averages of $24.26 per MWh so far in 2026, $34.82 in 2025, and $59.94 over the past five years (2021-2025).

SUPPLY AND DEMAND

Average gas output in the U.S. Lower 48 states rose to 109.8 billion cubic feet per day (bcfd) so far in March, up from 109.2 bcfd in February, according to data from financial firm LSEG. That compares with a monthly record high of 110.6 bcfd in December 2025.

Energy analysts said mostly mild weather this week likely allowed energy firms to leave more gas in storage than usual, which should keep stockpiles about 2% below normal for the week ended March 6, the same as the week ended February 27. EIA/GAS NGAS/POLL

Meteorologists forecast weather across the country will remain mostly warmer than normal through March 21, which should keep heating demand and the amount of gas energy firms need to pull from storage low in coming weeks. The weather, however, is still expected to be a little cooler in two weeks than next week.

LSEG projected average gas demand in the Lower 48 states, including exports, would drop from 123.9 bcfd this week to 113.0 bcfd next week with milder weather before climbing to 120.9 bcfd in two weeks with cooler weather. The forecast for next week was higher than LSEG's outlook on Thursday.

Average gas flows to the nine big U.S. LNG export plants slid to 18.1 bcfd so far in March, down from a record 18.7 bcfd in February.

In the Middle East, QatarEnergy halted LNG production and declared a force majeure due to the Iran war, causing global gas prices to soar. Qatar is one of the biggest LNG producers in the world along with the U.S. and Australia.

Gas traded near $18 per mmBtu at the Dutch Title Transfer Facility (TTF) TRNLTTFMc1 benchmark in Europe and near $16 at the Japan-Korea Marker (JKM) JKMc1 benchmark in Asia. NG/EU