Natural Gas News: Cash Market Weakness and High Storage Signal Bearish Outlook

Natural Gas Futures Slip as U.S. Storage Builds and Regional Prices Flash Red

U.S. natural gas futures opened the week under pressure, with no bullish catalysts emerging over the weekend. Prices are trading near a minor pivot at $3.161, and traders are watching that level closely for directional signals.

A sustained move below this pivot would likely accelerate selling toward support at $3.063, while upside looks capped by resistance at $3.238–$3.261 and the 50-day moving average at $3.307. With cash prices turning negative in key regions, the tone remains bearish.

At 12:18 GMT, Natural Gas Futures are trading $3.147, down $0.059 or -1.84%.

Is Strong U.S. Production Keeping a Lid on Futures?

Dry gas output in the Lower 48 averaged 107.4 Bcf/d in September, slightly off the August peak but still elevated. Friday’s drop to 106.3 Bcf/d marked an 11-week low but remains within range of historical highs. High production has allowed for strong storage builds, with inventories now 6% above the five-year average heading into October. This surplus is acting as a ceiling on prices, especially without a significant demand event on the horizon.

How Are Regional Bottlenecks Distorting Cash Prices?

Cash gas prices at the Waha Hub in West Texas fell into negative territory for the 12th time this year, driven by pipeline maintenance, infrastructure constraints, and a lack of takeaway capacity. While Henry Hub benchmark prices hover around $2.83/MMBtu, these regional bottlenecks are causing steep discounts and eroding producer margins. The dislocations emphasize that localized oversupply—rather than national supply-demand balance—is dragging on spot prices.

Are Hurricanes Providing Any Support for the Bulls?

The market is tracking Hurricane Humberto, which is intensifying in the Atlantic but steering clear of the Gulf of Mexico. Another tropical wave near the Bahamas also has a high chance of development but is unlikely to affect Gulf energy assets.

Without threats to LNG terminals or offshore rigs, these systems are more likely to reduce demand via power outages than support prices through supply disruptions. For now, weather risk is leaning neutral to bearish.

How Much Worse Can Canadian Cash Prices Get?

Western Canada is dealing with a historic supply glut. At Alberta’s AECO hub, prices settled between minus $0.55 and minus $0.80 per GJ last week, marking the lowest September pricing in over a decade. Storage in the region sits 20% above seasonal norms.

Delays in ramping up LNG Canada’s export terminal and seasonal maintenance have stalled demand growth, forcing producers like Pine Cliff Energy, ARC Resources, and Tourmaline to shut in production or even pay to offload gas.

Market Forecast: Bearish Tone Prevails Below $3.161 Pivot

With U.S. output strong, storage high, and no immediate weather or infrastructure threats, natural gas futures remain under pressure.

Regional dislocations and negative cash prints are undermining sentiment, and unless futures can reclaim the $3.161 pivot with conviction, the market appears vulnerable to further downside.

The short-term outlook remains bearish unless a demand-side surprise emerges.

More Information in our Economic Calendar.