U.S. gas prices continued falling last week amidst a culmination of bearish influences based on warm weather, firm production, and muted consumption trends. Natural gas has witnessed widespread headwinds, as many consecutive trading sessions have had lower closes, underlining deteriorating sentiment among floors. Most of the downward pressure results from unusually mild weather sweeping over major demand areas in the Midwest and Eastern United States, dramatically suppressing heating requirements and consequently diminishing residential and commercial natural gas demand.

Forecasts still indicate higher-than-normal temperatures carrying through into early May, curtailing any late-season natural gas demand support. This low demand scenario crossed paths with strong domestic production, which continues near historic highs. Natural gas production has remained stubborn, driving the increasing oversupply scenario. To top it off, Canadian pipeline flows into the United States have added to aggregate availability, making it more challenging for the natural gas market to find equilibrium. Consequently, storage injections are still above seasonal levels, though the latest addition fell short of expectations slightly because of cooler weather in some areas.

In the residential and commercial markets, natural gas consumption experienced a sharp drop, particularly in the Northeast where climatic warming trends sharply reduced heating degree days. Industrial demand also exhibited modest indications of withdrawal, supporting the larger picture of consumption weakness. Though power sector natural gas usage provided some measure of stability, the increase in electricity generation has not been enough to counter demand softness elsewhere.

On the export side, natural gas continues to be partially sustained by liquefied natural gas (LNG) exports. Export volumes from prominent U.S. terminals were unchanged, with a few ships sent to foreign purchasers. The longer-term outlook remains positive with ongoing development of future LNG facilities, and recent policy moves suggest renewed support for project approvals. Nevertheless, this longer-term optimism is not likely to weigh on the short-term direction of natural gas prices. Feedgas supplies to LNG plants exhibited some volatility this week, indicating periodic changes in export levels.

Overall, natural gas market fundamentals continue to be decidedly bearish in the near term. The intersection of subdued weather-driven demand, stubborn supply, and ongoing storage builds continues to depress sentiment. Lacking a substantial catalyst—be it unexpected cold snaps, production outages, or sharp surges in export activity—the natural gas market will likely remain pressured. Even as LNG demand and power generation usage provide small offsets, the overall story on natural gas remains one of imbalance and excess supply, keeping prices solidly on the back foot.