Eseandre Mordi
⬤ Natural gas production has stabilized after the winter freeze chaos, but we're still sitting almost 4 BCF per day below December's record peak of around 107.1 BCF daily. The recovery's been pretty sluggish even though weather disruptions have normalized.
⬤ The data tells a pretty clear story. Production bounced back from those brutal late-January freeze-offs and settled into the 106-108 BCF per day range over the past three months. But here's the kicker—output is only up 2.1 BCF per day compared to last year. That's nowhere near enough to keep pace with demand. The year-over-year numbers actually dipped negative for a bit after the freeze knocked production sideways.
⬤ Meanwhile, LNG export demand is absolutely crushing it, up somewhere between 3-4 BCF per day year-over-year. That's outpacing production growth by a mile. "Even as output recovers from weather disruptions, supply gains are not sufficient to fully offset rising export flows," which means the market's walking a tightrope right now.
⬤ This supply-demand mismatch matters big time. With production still trailing December highs and yearly gains falling short of LNG export growth, there's basically no cushion left in the system. Any weather hiccups or production issues could shake things up fast, keeping traders on edge and volatility front and center heading into the next few weeks.
Eseandre Mordi
