The latest inventories report from the U.S. Department of Energy showed a higher-than-expected increase in natural gas supplies. After the first increase of the year, futures ended the week lower.
Despite the weekly decline, natural gas prices remain resilient, driven by limited production growth and strong global demand. The market is trading at around $4 after hitting its highest level since December 2022 earlier this month, and remains stable.
First batch of natural gas in 2025
Underground inventories in the lower 48 states rose by 9 billion cubic feet during the week ended March 14, beating analysts’ expectations of adding 3 billion cubic feet. This increase compares to the five-year average net decrease (2020-2024) of 31 billion cubic feet and the pumping of 5 billion cubic feet of natural gas during the reported week last year.
The first weekly rise in natural gas inventories for 2025 brought total natural gas inventories to 1,707 billion cubic feet, 624 billion cubic feet (26.8%) below the 2024 level, and 190 billion cubic feet (10%) below the five-year average.
Total natural gas supply averaged 110.6 billion cubic feet per day, down 0.1 billion cubic feet per day week-on-week, due to lower shipments from Canada, partially offset by higher dry production.
At the same time, daily consumption fell to 104.3 billion cubic feet from 110.1 billion cubic feet in the previous week, mainly reflecting lower residential/commercial use due to warm weather in most parts of the country. This continued export demand is putting pressure on domestic supply, reinforcing pressure on prices to raise them despite temporary declines.
Promising shares in the natural gas sector as prices stabilize
There is electricity demand expected to rise during warmer months, and LNG exports continue at record levels, natural gas prices are likely to remain at around US$4 per million British thermal units in the near term.
Three Worthwhile Stocks
Antero Resources: Antero Resources is one of the leading natural gas producers in the United States. Antero Resources has more than two decades of premium low-cost drilling stocks in the production-rich Appalachian Basin, indicating a strong production outlook. Also Antero Resources produced 316 billion cubic feet equivalent (BCFE) in the fourth quarter, of which more than 60% was natural gas.
Zachs’ unanimous estimate of Antero Resources earnings per share for 2025 indicates impressive growth of 1,381% year-on-year. Over the past 60 days, Antero Resources’ 2025 earnings per share, rated No. 1 (strong buying) from Zachs, has risen by 23.4%.
Cotera Energy: An independent upstream company, mainly engaged in the exploration, development and production of natural gas. Headquartered in Houston, Texas, it owns approximately 183,000 net acres in the gas-producing Marcellos Shell area of the Appalachian Basin. The share of the No. 3 (retention) company of natural gas in its total production is about 65%.
Last week saw April futures rise 19.5 cents on Wednesday to settle at $4.247, before falling 27.5 cents on Thursday after the U.S. Energy Information Administration (EIA) reported an increase in inventories of 9 billion cubic feet for the week ended March 14.
Coterra’s expected earnings per share growth rate is currently 15.5% for three to five years, which is good compared to the sector’s growth rate of 11.4%. Cotera Energy estimates its 2025 profit at $22 billion, which has risen by almost 4.8% over the past 60 days.
Prices fell last week, but supply constraints keep market tight
Natural gas prices fell last week following a better-than-expected increase in inventories. April futures closed at $3.98 on the New York Mercantile Exchange, recording a 3 percent decline%.
Despite this decline, prices remain high, recently reaching a two-year high of 4.491 USD. The combination of cold weather, supply disruptions and global demand has maintained market strength. Both the United States and Europe saw record drawdowns of inventories this winter, tightening supply conditions and supporting higher prices.
In 2024, the natural gas market faced significant constraints due to harsh winter conditions and slowing production growth. Frequent Arctic cold spells in the United States have increased demand for heating, while causing freezing in key production areas such as Appalachia and Permian, resulting in lower production. By late February 2025, working gas inventories were down 5 percent below the five-year average, further tightening supply.
Europe’s energy crisis worsened with the closure of Russian gas transport through Ukraine on January 1, 2025, increasing the continent’s dependence on LNG imports, especially from the United States. As the world’s largest supplier of liquefied natural gas, the United States exports a record 16 billion cubic feet per day, with European and Asian buyers competing for cargo. This continued export demand is putting pressure on domestic supply, reinforcing pressure on prices to raise them despite temporary declines.
Market Outlook
As summer 2025 approaches, attention will shift to gas pumping into stockpiles. The U.S. Energy Information Administration expects U.S. natural gas inventories to end the March draw season by about 4 percent above the five-year average, which could keep prices supported.
