US Natural Gas Prices Extend Gains

US natural gas prices climbed to around $3.16 per MMBtu, extending gains for a fourth session and reaching their highest level since September 25, supported by falling production, LNG feedgas flows, and expectations of more demand. Average gas output in the US Lower 48 states fell to 111.7 bcfd so far in October, down from record highs of 113.3 bcfd in both August and September, while daily production continued to drop partly due to recent force majeure events and other disruptions affecting pipelines in Kentucky, Texas, and West Virginia. LNG demand also provided support, with daily feedgas flows rising as Freeport LNG in Texas ramps up gas intake following the return of a liquefaction train from maintenance. Meanwhile, forecasts shifted warmer, with above-average temperatures expected across the western two-thirds of the US through October 10, which could lift cooling demand and gas consumption for power generation.

US natural gas prices rose to around $3.1 per MMBtu, extending gains amid expectations of cooler weather later this month that could lift heating demand. Forecasts turned cooler across the northern and western US for October 12-15, potentially increasing gas consumption. Robust LNG demand also continued to support the market, with feed gas flows to the nine major US export plants averaging 17.9 bcfd in September, up from 17.2 bcfd in August. At the same time, demand for US LNG from European and Asian buyers continued to rise as they sought to replenish storage ahead of winter. Meanwhile, the latest EIA report showed a 64 bcf storage build for the week ended September 25, below the five-year average increase of 80 bcf, indicating that the inventory surplus is gradually narrowing. Partly offsetting these factors, Lower 48 production remained solid, averaging a record 113.3 bcfd in September and matching the monthly record high set in August.

US natural gas prices hovered around $3.0 per MMBtu on Friday, and fell more than 6% this week, as traders anticipated stronger production and relatively mild weather that could limit demand for both heating and cooling. The EIA reported a 64 bcf increase in gas storage for the week through September 25, matching forecasts but remaining below the five-year average build of 80 bcf. Production in the Lower 48 averaged a record 113.3 bcfd in September, although output dropped to about 110.7 bcfd over the past week following a temporary disruption on TC Energy’s Columbia Gas Transmission system. The force majeure, which affected roughly 1.4–1.8 bcfd of flows, was lifted after repairs on September 27. Looking ahead, forecasts call for mostly normal temperatures through October 16. Meanwhile, LNG feedgas demand strengthened, averaging 17.9 bcfd in September versus 17.2 bcfd in August.