U.S. natural gas futures rose about 3% after a bigger-than-expected drawdown in storage signaled stronger near-term demand and as the escalating U.S.–Iran war intensified global energy-supply worries. April delivery futures climbed roughly 2.9% to around $3.003 per million British thermal units (mmBtu), with traders reacting to both domestic fundamentals and a geopolitical shock that has pushed up energy prices worldwide.
The most immediate driver was the weekly U.S. storage report. The U.S. Energy Information Administration (EIA) said utilities pulled 132 billion cubic feet (bcf) of gas from storage for the week ending Feb. 27—a withdrawal larger than analysts expected and also above typical seasonal norms. The draw is attributed to higher heating demand linked to a major winter storm that boosted consumption for space heating and power generation. A larger withdrawal matters because it tightens the cushion of stored gas that helps stabilize prices late in winter, especially when cold snaps arrive unexpectedly.
Beyond storage, short-term demand forecasts strengthened, adding to the upward pressure. That boost, however, may not last: weather-driven demand often swings quickly, and forecasters expect consumption to ease as temperatures moderate. This “cold now, warmer later” pattern helps explain why prices climbed but did not spike dramatically—traders are weighing a near-term squeeze against the prospect of softer demand in the following weeks.
The geopolitical backdrop is the larger story. The U.S.–Iran conflict has disrupted energy flows from the Middle East and raised the risk premium across fuels, including natural gas—especially because global liquefied natural gas (LNG) markets are tightly connected. War-related disruptions hit LNG supply, including impacts involving Qatar, one of the world’s largest LNG exporters. When LNG supply is threatened, Europe and Asia often bid up prices, competing for cargoes and tightening the global market.
Even so, the U.S. price reaction has been relatively restrained compared with overseas markets. The United States is already exporting LNG near full capacity, limiting how much additional international demand can directly pull more U.S. gas into exports in the short run. In other words, the U.S. can’t instantly ship dramatically more LNG just because Europe is paying more—so U.S. futures rise mainly on domestic supply-demand changes (like cold-weather draws), not purely on overseas price surges.
Production has also helped cap the move. Early March U.S. output was around 109.5 billion cubic feet per day, slightly higher than February, which provides a stabilizing effect even as demand spikes. Meanwhile, LNG export flows from major U.S. plants dipped slightly, another factor tempering the immediate upside in U.S. prices.
Overall, U.S. gas prices are being tugged higher by a late-winter storage surprise and global war-driven supply anxiety, but abundant domestic output and export constraints are preventing the kind of runaway spike seen in Europe, where prices jumped far more sharply as global LNG availability tightened.
