U.S. natural gas prices drop 4.6% due to inventory

U.S. natural gas prices dropped sharply on Thursday. This decline followed a report from the Energy Information Administration (EIA) about an unexpected increase in gas inventory. Prices fell by 4.6%, settling at $4.05 per million British thermal units (MMBtu). This comes after prices reached a high of $4.35/MMBtu earlier this month. Utilities added 9 billion cubic feet of gas to storage for the week ending March 14. This increase was much higher than analysts' predictions of just 3 billion cubic feet. It marked the first rise in inventory since November 2024 and helped reduce the existing storage deficit. However, U.S. gas inventories are still down 26.8% from a year ago and are 10% below the five-year average. Earlier in March, gas prices surged as U.S. liquefied natural gas (LNG) exports hit a record high. This was boosted by new production at the Plaquemines LNG facility in Louisiana, which began operations 30 months after initial investment plans were approved. Venture Global CEO Mike Sabel noted that the fast development of the Plaquemines plant positions the U.S. as a leading exporter of LNG. The company plans to invest $50 billion in U.S. energy projects, which would create jobs and support local economies. As demand in Europe for natural gas rises, the U.S. is accelerating the development of LNG facilities. Recently, Cheniere Energy also began production from the Corpus Christi Stage 3 Liquefaction Project, which is nearing completion. This project is expected to produce over 10 million tonnes of LNG per year.