Been watching nat gas prices bounce around lately and it's interesting how the supply picture is shaping up. Thursday's EIA report showed inventories fell 144 bcf for the week, which was less than the expected 149 bcf draw. That smaller-than-expected drawdown actually weighed on prices, pushing March futures down about 0.5% despite some bullish weather signals.

The thing is, whether gas is going up or down seems to hinge on a few competing factors right now. On one hand, forecasters shifted their outlook colder for the western US through late February, which should boost heating demand. But on the flip side, production keeps climbing. The lower-48 states are pumping out 113.1 bcf per day, up over 12% year-over-year, and the EIA just raised their 2026 production forecast. Active gas rigs hit a 2.5-year high last week at 133 rigs, so we're seeing more supply coming online.

Demand is the wildcard here. Gas demand came in at 87.5 bcf per day on Thursday, down significantly year-over-year. Meanwhile, storage levels are still running tight compared to seasonal averages. So while production growth is pressuring prices downward, the tight supply situation keeps a floor under them. It's basically a tug-of-war between record production ramping up and still-constrained inventories. Hard to say which way gas prices break from here without seeing how demand responds to the weather shifts.