Natural Gas Update October 8,2025

Overview

Natural Gas--NG is down 6.3 cents at $3.435.
NG futures are lower now after rallying overnight as this morning Market News commentary said that "supported by above normal demand and slightly lower domestic production" .

Tuesday's rally was seen fueled by "ebbing production, record LNG flows and now cooling forecasts for the latter half of October", as per EBW Analytics comments. Market news also cites lower production, but also adds that short covering helped fuel the rally. This is evidenced somewhat by the large drop in NG futures open interest in the October contract as per CME data. The October open interest fell by over 24,000 contracts.

US domestic natural gas production is estimated 0.306 BCF/d lower today at 106.8 BCF/d compared to an average of 108.0 BCF/d over the previous week, according to Bloomberg data.

On Tuesday, LSEG projected average gas demand in the Lower 48 states, including exports, would slide from 99.2 BCF/d this week to 97.5 BCF/d next week. These estimates were down 0.9 BCF/d total versus those seen Monday.

The Henry Hub natural gas spot price in the STEO forecast rises from just under $3.00 in September 2025 to $4.10/MMBtu in January 2026. But, the EIA's January forecast price is almost 50 cents/MMBtu lower than it was in last month’s outlook. Lower natural gas prices largely reflect their expectation that U.S. natural gas production will be higher than previously forecast. The EIA raised their end of season October 2025 storage forecast by 66 BCF to 3.978 TCF and their March 2026 forecast by 138 BCF to 1.990 TCF from their estimates of last month.  The EIA expects the US will add 5 BCF/d in LNG export capacity in 2025 and 2026. They thus see LNG export capacity increasing total LNG exports to 14.7 BCF/d in 2025 and to 16.3 BCF/d in 2026, up from 11.9 BCF/d in 2024. The EIA's STEO increased their forecast for US natural gas production this year by 0.5 BCF/d to 107.1 BCF/d and next by 1.4 BCF/d to 107.4 BCF/d.  In so doing,  the EIA reduced their price forecast for 2025 by 10 cents to $3.42 and for 2026 by 34 cents to $3.94.

European gas inventories have trended more bullish over the past 6 weeks, as per Celsius Energy analysis. At just 3,245 BCF, storage is distancing itself for the 2nd lowest level in the last 5 yrs, above only 2021. And the storage deficit versus the 5 year average has widened to -249 BCF, the largest since late August

Renewable energy sources generated more electricity than coal globally for the first time in the first half of 2025, driven by growth in China and India. (LSEG)

Technically momentum for the NG futures basis the DC chart looks to be cresting to turn lower. Resistance above lies at last week's high at 3.585 and then at 3.628-3.629. Support is seen below at 3.425-3.426 and then at 3.351-3.355.

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