Why Is the USA Natural Gas Price Rising?

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Why Is the USA Natural Gas Price Rising?

U.S. natural gas is trading higher today on a combination of technical factors and geopolitical tensions that pose the potential for supply disruptions. That’s what Art Hogan, Chief Market Strategist at B. Riley Wealth, told Rigzone in an exclusive interview on Wednesday when asked why the U.S. natural gas price is rising today. “Technically natgas […]

U.S. natural gas is trading higher today on a combination of technical factors and geopolitical tensions that pose the potential for supply disruptions.

That’s what Art Hogan, Chief Market Strategist at B. Riley Wealth, told Rigzone in an exclusive interview on Wednesday when asked why the U.S. natural gas price is rising today.

“Technically natgas is trading above key support of $3.47, which is the 50-day Exponential Moving Average (EMA),” Hogan said.

“The next resistance sits at $3.72. On the fundamental side of things, the American Petroleum Institute data released yesterday reflected tighter supply,” he added.

“Additionally, U.S. energy firms like Diamondback Energy and Coterra Energy have announced rig reductions, potentially curbing future output,” he continued.

Rigzone has contacted Diamondback and Coterra for comment on Hogan’s statements. The companies have not responded to Rigzone at the time of writing.

In its first quarter results statement, which was posted on the company’s website on May 5, Diamondback said it “is reducing its activity levels and lowering its capital budget to prioritize free cash generation”.

In Coterra’s first quarter results statement, which was published on the company’s site on Monday, Tom Jorden, Chairman, CEO and President of Coterra, said, “we believe it is prudent to reduce oil directed activity at this time”.

“As such, we are lowering Permian investment in 2025 and now expect to average seven Permian rigs during the second half of the year, down 30 percent from our original guidance of ten,” he added.

“As planned, we added two natural gas focused rigs in the Marcellus in April and may keep this activity running for the balance of 2025,” he went on to state.

When he was asked why the U.S. natural gas price is rising today in a separate exclusive interview, David Seduski, the head of North American gas at Energy Aspects, told Rigzone there were two reasons.

“Yesterday’s prices closed lower by nine cents for the prompt contract, despite the overall trend in the market being for tighter balances,” Seduski said.

“The market opened yesterday higher, before reversing to day on day losses following an outage at Freeport LNG. There was a power interruption that caused all three Freeport trains to trip,” he added.

“The market reacts aggressively to Freeport outages, given the facility rarely releases statements and it has endured very long outages in the past,” he continued.

“However, the facility is back to within 90 percent of its early May baseline per today’s early pipeline nominations. So, the outage scare that undercut price strength yesterday has now vanished, leading prices higher,” Seduski went on to state.

Seduski also told Rigzone that the two week forecast has added cooling degree days (CDD) at the outset of this week.

“Every day in our weather model will see higher CDDs than the 10-year normal in the Lower 48. That should drive additional power load at the outset of the cooling season, helping tighten balances,” he said.

Rigzone contacted Freeport LNG for comment on Seduski’s statements. Freeport LNG declined to comment.

Also responding to Rigzone’s question in another exclusive interview, Phil Flynn, a senior market analyst at the PRICE Futures Group, told Rigzone that U.S. natural gas prices are rising “on expectations we’re going to see some warmer weather in parts of the country, above normal temperatures”.

“That’s also going to give the market a little bit of momentum,” Flynn added.

Flynn also highlighted “record LNG exports” in his response and noted that “we did get supportive talking points from the Energy Information Administration (EIA) yesterday and their short term energy outlook (STEO)”.

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