Natural Gas News: Futures Slide After Inventory Report as Weather Caps Forecast

Natural Gas Edges Lower After EIA Storage Report Narrows the Deficit

U.S. natural gas futures are edging lower on Thursday, shortly after the release of the government’s weekly storage report. Despite coming in better-than-expected, prices still weakened, suggesting traders have shifted their focus toward weather and production, just ahead of the start of the spring shoulder season.

At 16:41 GMT, April Natural Gas is trading $2.796, down $0.072 or -2.51%.

EIA Report Narrows the Deficit but Renews Selling Pressure

According to the U.S. Energy Information Administration “Working gas in storage was 2,018 Bcf as of Friday, February 20, 2026. This represents a net decrease of 52 Bcf from the previous week. Stocks were 141 Bcf higher than last year at this time and 7 Bcf below the five-year average of 2,025 Bcf. At 2,018 Bcf, total working gas is within the five-year historical range.”

Before the report, natural gas inventories were down 1.5% year over year and 5.6% below their 5-year seasonal average, signaling tight natural gas supplies. Today’s report narrowed the deficit, leading to the renewed selling pressure. This is something we’ll be watching during the upcoming shoulder season when demand drops and production rises. It is important to go into the summer cooling season with a surplus.

Production and LNG Flows Steady as Rig Count Hits 2.5-Year High

On the production side, traders are watching dry gas production and LNG net flows to U.S. LNG export terminals. Dry gas production on Wednesday was 112.3 Bcf/day, according to BNEF and up 7.1% year over year. LNG net flows were 19.5 Bcf/day, unchanged.

The number of active drilling rigs currently sits at 133, a 2.5-year high according to Baker Hughes. This is up from a 4.75-year low of 94 rigs from September 2024.

Polar Vortex Threat in Mid-March Could Flip the Market

The weather could be the source of volatility in the market. Currently, both the Commodity Weather Group and NatGasWeather are calling for above-normal temperatures for much of the U.S. through the first week of March.

However, on Wednesday, EBW Analytics Group said the probability increased for a “polar vortex” weather pattern returning in the middle of March. This is what triggered an historical rally in late January so let’s just hope traders don’t get caught with big short positions if it hits. A big draw in the middle of March will also create a big deficit, which would be a bullish development if it extends into the summer cooling season.

Trend Is Down with $3.150 the Key Level to Watch

Technically, the trend is down according to the swing chart and the 50-day moving average. The swing chart top is $3.150, downside targets are swing bottoms at $2.627 to $2.604. The 50-day moving average at $3.142 is resistance.

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