Looking to the Futures
WTI Climbs on Middle East Supply Concerns
Natural gas prices traded off their recent lows to start the week as foreign supply continues to show signs of instability. US electricity output has increased year-over-year, providing additional support. In the bear camp, US Natural gas production has pushed near record highs.
Nat gas prices ticked higher yesterday as the energy markets continue to weigh the likelihood for the opening of the Strait of Hormuz. The closure of the Strait has reduced Middle Eastern nat gas supplies, causing the United States to ramp up production.
On March 19th, reports of extensive damage at Ras Laffan Industrial city in Qatar caused significant production delays in one of the world’s largest natural gas export plants. Qatar reported that the attacks by Iran damaged 17% of the plant’s export capacity and could take between three to five years to repair. The Ras Laffan plant produces nearly 20% of the global liquified natural gas supply and supplies many Asian and European countries.
Also in the bull camp, the electricity output in the US has increased year-over-year. According to the Edison Electric Institute report last Wednesday US electricity output in the lower-48 rose +6.5% y/y to 77,299 GWh in the week ending April 18th. US electricity output in the 52-week period ending April 18th increased +1.8% y/y to 4,327,186 GWh.
In response to a tightening world supply the United States has ramped up nat gas production. According to BNEF US dry gas production increased +3.7% y/y to 110.4 bcf/day on Friday. Lower-48 gas demand increased +4.3% y/y to 68.2 bcf/day. Estimated LNG net flows to US LNG export terminals were up +0.7% w/w to 19.7 bcf/day on Friday. Earlier this month the EIA raised its forecast for 2026 US dry nat gas production to 109.59 bcf/day from a March estimate of 109.49 bcf/day.
Last week's EIA report saw nat gas inventories increase by +103 bcf, above the expected +97 bcf, in the week ending April 17th. Natural gas inventories were up +6.7% y/y, and +7.1% above the 5-year seasonal average in the week ending April 17th. Gas storage in Europe was 31% full, compared to the 5-year seasonal average of 43% full for this time of year in the week ending April 21st.
Last Friday, Baker Hughes reported the number of active US nat gas drilling rigs rose by +4 rigs to 129 in the week ending April 24th.
Technicals
Looking at the daily chart for the Natural Gas June 2026 Futures Contract (/NGM26) we can see the significant downtrend since late January. The 20-Day Simple Moving Average has been acting as a resistance level throughout the month of April and yesterday the contract was once again not able to trade through that price point.
The Daily Technical Summary from Hightower Research has support levels at 2.641 and 2.600 with resistance levels at 2.731 and 2.781.
The 14-Day Relative Strength Index at 37.82% indicates more sellers than buyers but the contract is not in oversold territory.
What else to watch today
Contract Specifications
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