October Nymex natural gas (NGV26) on Thursday closed up +0.010 (+0.35%).
Nat-gas prices settled higher on Thursday on a smaller-than-expected build in weekly nat-gas storage. The EIA reported on Thursday that nat-gas inventories rose by +44 bcf the week ended September 11, below expectations of +48 bcf.
However, nat-gas prices gave up most of their advances Thursday on forecasts of cooler US weather, which could reduce nat-gas demand from electricity providers for air conditioning. The Commodity Weather Group said Thursday that forecasts shifted cooler, with above-average temperatures now covering a smaller portion of the South and Southeast from September 22 to October 1.
Monday’s rally in European gas prices to a 3.75-year high has provided carryover support to US gas prices. European nat-gas is soaring as sharply reduced supplies from the Middle East due to the closure of the Strait of Hormuz from the US-Iran war are keeping European nat-gas storage levels well below normal, a bullish factor ahead of winter, when demand typically surges.
In a bearish medium-term factor for nat-gas prices, the market is expecting a “Super El Niño” to bring warmer-than-normal temperatures to the Northern Hemisphere this fall and winter, reducing heating demand for nat-gas.
US (lower-48) dry gas production on Thursday was 113.2 bcf/day (+5.0% y/y), according to BNEF. Lower-48 state gas demand on Thursday was 77.0 bcf/day (+3.8% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Thursday were 18.7 bcf/day (-4.1% w/w), according to BNEF.
As a positive factor for gas prices, the Edison Electric Institute reported Wednesday that US (lower-48) electricity output in the week ended September 12 rose +16.1% y/y to 94,427 GWh (gigawatt hours). Also, US electricity output in the 52 weeks ending September 12 rose +3.3% y/y to 4,405,549 GWh.
As a bearish factor, the US Energy Information Administration (EIA) on August 11 projected that US nat-gas storage levels will swell to 3,985 bcf at the end of October, the highest level in 10 years and 5% above the five-year average. Last Monday, the EIA raised its 2027 US dry natural gas production estimate to 116.0 bcf/day from 115.3 bcf/day projected in July.
Thursday's weekly EIA report was bullish for nat-gas prices, as it showed a +44 bcf increase in US nat-gas inventories for the week ended September 11, below expectations of +48 and below the 5-year weekly average of +74 bcf. As of September 11, nat-gas inventories were down -3.9% y/y and +3.7% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of September 15, gas storage in Europe was 69% full, compared to the 5-year seasonal average of 85% full for this time of year.
Baker Hughes reported last Friday that the number of active US nat-gas drilling rigs in the week ended September 11 rose by +2 to 132 rigs, just below the 3-year high of 134 rigs set in February 2026.
