Well, we’re sure you’ve seen the news yesterday; the US declared 25% tariffs on Canadian goods, and 10% on Canadian energy. In response, Canada imposed 25% tariffs on American products coming across our border. At the same time, temperatures across the US are expected to get colder.
In response to this news, the NYMEX March front month popped 25 cents when overnight trading opened on Sunday night.
At this point, a cautious attitude is appropriate. Trump changed his mind and postponed implementing the tariffs on Mexico for 30 days. Perhaps this will happen with Canadian tariffs too, but there is no guarantee. The lesson here is that if the market is trading at a good price that you are happy with, don’t hesitate.
Know that tariffs on energy are not logical. In 2024, about 9% of the natural gas consumed in the US came from Canada according to Reuters. Remember that energy has a very steep demand curve and even if prices go up, nobody is going to turn off their heat.
In other news, offsetting this increasing heating demand was the news that output is increasing. So far in February, the average output has been 105.7bcf/day. If these prices hold, I predict a record month for lower 48 natural gas production.
But that being said, this year has been anything but normal.

