Natural Gas Market Update: Cooler Temps Bring Storage Boost
Supply Holds Steady as Injections Pick Up
Natural gas supply remained stable at around 102.0 Bcf/d this past week. The cooler second half of August has recently led to stronger storage injections, with five of the last six injections approaching the five-year average. Last week’s EIA Natural Gas Storage Report showed a more substantial +35 Bcf injection, though we’ve only exceeded the five-year average twice since early May.
Looking ahead, pricing for future years has been gradually declining. The market anticipates monthly prices above $4.00 in January 2026.
Demand Dynamics: Power Generation Surges, LNG Exports Steady
Power demand for natural gas has surpassed last year’s levels and exceeded the five-year range. Meanwhile, LNG exports continue at a robust pace of around 13 Bcf/d.
In exciting news for the LNG sector, an LNG tanker arrived at the Plaquemines LNG facility, marking the first step in cooling LNG storage tanks. While it will take a few months before exports begin, this development signals progress in expanding LNG infrastructure.
ALL ABOUT THE NYMEX TWELVE-MONTH STRIP
• The NYMEX Twelve Month Strip is the average of the upcoming 12 months of closing Henry Hub natural gas futures prices as reported on CME/NYMEX.
• A futures strip is the buying or selling of futures contracts in sequential delivery months traded as a single transaction.
• The NYMEX Twelve Month Strip can lock in a specific price for natural gas futures for a year with 12 monthly contracts connected into a strip.
• The average price of these 12 contracts is the particular price that traders can transact at, indicating the direction of natural gas prices.
• The price of the NYMEX Twelve Month Strip can show the average cost of the next twelve months’ worth of futures.
• The NYMEX Twelve Month Strip is also used to understand the direction of natural gas prices and to lock in a specific price for natural gas futures for a year.
Weather Outlook: East Cools Down, Warmth on the Horizon
Cooler-than-normal temperatures in the East have temporarily reduced power demand, a trend expected to last 8-10 days. However, a warm front could break through the high-pressure ridge in the Plains states, warming up the entire country.
For the week of September 3-9, weather systems will impact many regions of the US, bringing comfortable highs of the 60s-80s and resulting in lighter national demand.
As we move into fall, keep an eye on these critical factors shaping the natural gas market. Stay tuned for updates on storage reports, production levels, and forward power prices in the coming weeks.
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NATURAL GAS PRODUCTION
