Natural Gas News: Forecast Turns Cautiously Bearish as Market Eyes Late-September Heat

Storage Build and Production Surge Weigh on Natural Gas as Exports Dip

U.S. natural gas futures ended the week in retreat, settling at $2.941, down 10.7 cents or 3.51%. Despite midweek support from warmer forecasts, the market was pressured by strong production, a bearish storage report, and a notable drop in LNG feedgas flows.

200-Day Moving Average, 50% Levels Capping Gains

Technically, the main trend is down, but the closing price reversal bottom at $2.695 has stopped the selling, at least temporarily. The subsequent rally to $3.198 was stopped by the first 50% level at $3.238.

The new minor range is $2.695 to $3.198. Its 50% level at $2.947 is currently being tested. Trader reaction to this pivot will determine whether we see a resumption of the short-covering rally, or a retest of $2.695 to $2.647.

Overcoming $3.238 will shift momentum to the upside. This could lead to a test of the 50% level at $3.598, followed by long-term resistance at the 200-day moving average at $3.788.

Late-Season Heat Offers Limited Support

Prices found temporary footing late in the week after forecasts shifted warmer across the South and mid-continent for September 17–21. Weather services including Atmospheric G2 and Vaisala called for above-normal temperatures into late September, suggesting a potential lift in air conditioning demand and power burn.

Still, fundamentals didn’t fully align with the bullish narrative. While U.S. electricity output rose 1.03% year-over-year last week, total Lower-48 gas demand remained weak at 70.3 Bcf/day—down 3.2% y/y—suggesting that even with hotter temperatures, structural demand remains subdued.

Production Strength and LNG Weakness Cap Upside

Supply-side pressure remained the dominant force. U.S. dry gas output hit 108.0 Bcf/day on Friday, up 7.1% from the prior year and near all-time highs. The EIA also revised its 2025 production forecast slightly higher to 106.63 Bcf/day, reflecting confidence in the supply outlook.

Meanwhile, LNG feedgas flows dropped to 14.5 Bcf/day, down 4.7% week-over-week, marking a new three-week low. Seasonal maintenance along the Gulf Coast disrupted pipeline flows and limited near-term export capacity—an increasingly important demand outlet for U.S. gas.

Storage Surplus Reinforces Bearish Narrative

The weekly EIA report showed a +71 Bcf build for the week ending September 5, surpassing expectations and exceeding the five-year average of +56 Bcf. Total inventories now sit 6% above seasonal norms. While levels remain slightly below last year’s mark, the supply cushion is viewed as more than adequate heading into fall.

European storage stood at 80% full as of September 9, only modestly below the five-year average of 86%, further limiting bullish momentum from global demand drivers.

Market Forecast: Bearish Tilt Persists into Late September

With production hovering at record highs, export volumes softening, and storage running above normal, the market faces continued downside pressure. Even supportive weather may only slow—not reverse—price weakness. Without a significant surge in either LNG demand or domestic consumption, the near-term outlook remains bearish into late September.

More Information in our Economic Calendar.