The U.S. Energy Department's latest inventory report showed a higher-than-expected increase in natural gas supplies. Despite this bearish data, futures ended the week up. Natural gas continued to tick upward and gained 13.4% during the just-concluded first quarter, reflecting an attractive market.
With the fuel trading around $4, investors are advised to buy natural gas-focused stocks such as Expand Energy EXE, Excelerate Energy EE and The Williams Companies WMB.
Stockpiles held in underground storage in the lower 48 states rose by 37 billion cubic feet (Bcf) for the week ended March 21, above analysts’ guidance of a 25 Bcf addition. The increase compared with the five-year (2020-2024) average net decline of 31 Bcf and last year’s withdrawal of 30 Bcf for the reported week.
The second weekly build of 2025 put total natural gas stocks at 1,744 Bcf, 557 Bcf (24.2%) below the 2024 level, and 122 Bcf (6.5%) lower than the five-year average.
The total supply of natural gas averaged 110.8 Bcf per day, up 0.1 Bcf per day on a weekly basis due to higher shipments from Canada, partly offset by lower dry production.
Meanwhile, daily consumption rose to 107.7 Bcf from 104.2 Bcf in the previous week, mainly reflecting higher residential/commercial usage.
Natural gas prices rose last week despite a larger-than-expected inventory injection. May futures closed at $4.065 on the New York Mercantile Exchange, marking a 2% increase. As a matter of fact, natural gas prices have enjoyed a phenomenal run of late. Following a dramatic 44% annual increase in 2024, the commodity surged more than 13% in the first quarter of 2025, as a mix of cold weather, supply disruptions, and global demand has kept the market strong. The United States and Europe both experienced record storage withdrawals this winter, tightening supply conditions and supporting higher price levels for the commodity that recently hit a two-year high of $4.491.
Natural gas markets tightened in 2024, driven by a mix of severe winter conditions and limited production growth. The United States saw multiple Arctic cold snaps that boosted heating demand during the first two months of 2025 while simultaneously leading to freeze-offs in key producing regions like the Permian and Appalachia. These disruptions caused a significant drawdown in storage levels, with working gas stocks 5% below the five-year average by late February 2025.
Europe is facing an even worse supply crunch. With Russian gas transit through Ukraine halted on Jan. 1, 2025, the continent is now more reliant on LNG imports, primarily from the United States. The country has emerged as the world’s largest LNG supplier, with exports averaging 16 Bcf per day — a record high. European and Asian buyers continue to absorb American LNG cargoes, pushing domestic supply lower and reinforcing price strength.
As summer 2025 approaches, the attention will shift to storage injections. With U.S. natural gas inventories more than 6% below the five-year average, prices remain well supported. As electricity demand climbs during the warmer months and LNG exports remain strong, natural gas prices are likely to stay around $4/MMBtu in the near term.
Expand Energy: Expand Energy has solidified itself as the largest natural gas producer in the United States following the Chesapeake-Southwestern merger. With key assets in the Haynesville and Marcellus basins, Zacks Rank #1 (Strong Buy) EXE is well-positioned to capitalize on the increasing demand for natural gas, driven by LNG exports, AI/data centers, EV expansion, and broader electrification trends.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Expand Energy’s 2025 earnings per share indicates a 422.7% year-over-year surge. Over the past 30 days, the Zacks Consensus Estimate for this firm’s 2025 earnings has moved up around 34.5%.
Excelerate Energy: Based in The Woodlands, TX, the company specializes in LNG infrastructure and services, focusing on Floating Storage Regasification Units (FSRUs) and related terminals. With operations across emerging and developed markets, Excelerate Energy represents 20% of the global FSRU fleet and 5% of global regasification capacity. Founded in 2003, the company aims to expand into LNG-to-power generation and gas distribution, delivering reliable and flexible energy solutions worldwide.
The Zacks Consensus Estimate for Excelerate Energy’s 2025 earnings per share indicates 11.8% year-over-year growth. Over the past 30 days, the Zacks Consensus Estimate for this #1 Ranked firm’s 2025 earnings has moved up around 8.4%.
The Williams Companies: With U.S. natural gas demand projected to grow significantly in the long term, The Williams Companies seems to be well positioned to capitalize on the same owing to its impressive portfolio of large-scale value-creating projects. With its extensive network handling a third of the U.S. natural gas and significant expansion projects in the pipeline, Zacks Rank #2 (Buy) Williams is set to benefit from favorable industry dynamics and growth prospects.
The Zacks Consensus Estimate for the company’s 2025 earnings per share indicates 14.1% year-over-year growth. Over the past 30 days, the Zacks Consensus Estimate for The Williams Companies’ 2025 earnings have moved up around 5.3%.
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