Just caught the latest inventory numbers and they're wider than expected. EIA came in with a -132 bcf draw for the week ending Feb 27, beating the consensus of -124 bcf. That kind of natural gas inventory news tends to get traders' attention, especially when it's bigger than anticipated.

The rally was solid on Thursday with April Nymex closing up about 3%, but honestly gains got capped pretty quick. Weather forecasts showing warmer temps across the eastern US through mid-March are keeping a lid on things since that means less heating demand. Can't fight the forecast.

What's interesting is the geopolitical backdrop still lingering from earlier in the month. When Qatar shut down Ras Laffan after that Iranian drone strike, it took offline roughly 20% of global LNG supply. That kind of disruption usually sends shockwaves through natural gas inventory dynamics, and we're still seeing some carryover effects.

On the supply side though, the picture's getting crowded. US dry gas production hit 113.1 bcf/day, up 5.6% year-over-year, and the EIA just bumped up their 2026 forecast to nearly 110 bcf/day. Plus active gas rigs are sitting at a 2.5-year high. More production typically pressures prices, so that's a headwind despite the recent natural gas inventory news showing tighter supplies.

Electricity demand did tick up though - lower-48 output rose 7.84% year-over-year for the week, which is a bright spot. But between rising production forecasts and milder weather, the bulls are fighting an uphill battle right now. The natural gas inventory situation would need to stay tight for prices to really push higher.