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- Natural Gas Update September 1, 2025
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Overview
Natural Gas---NG is down 3.5 cents
NG futures are lower now with the market having tested over $3 again today. The market was supported by the tighter supply picture that the prior 2 weeks EIA gas storage data showed. The market is likely still skeptical though as the weather does not show excessive demand for heating or cooling.
Weather remains the key swing factor. Forecasts project early-autumn coolness across the eastern U.S., reducing late-summer air-conditioning demand, while the West braces for hotter-than-normal conditions. The NOAA continues to flag 80% probability of above-average heatwaves in the Carolinas and Virginia, implying stronger regional power burn. Some cooling demand is seen in Texas in the coming days as San Antonio is set to see highs from Tuesday thru Friday that are 8 to 10 degrees above normal. The normal high is 90 degrees.
The Baker Hughes gas rig count seen Friday showed a decrease of 3 units, with one rig having been dropped in the key Haynesville region. The lower gas rig count is supportive and underscores some of the perceived supply tightness that the past 2 week's EIA storage data implied.
CFTC data seen Friday showed money managers added to their net short position in the week ended Tuesday August 26. Net shorts rose by 7,559 to a total of 44,343 contracts.
The EIA, in its weekly gas update last week. said that the average rate of injections into storage is 18% higher than the five-year average so far in the refill season. If the rate of injections into storage matched the five-year average of 9.9 BCF/d for the remainder of the refill season, the total inventory would be 3.907 TCF on October 31, which is 154 BCF higher than the five-year average of 3,753 BCF for that time of year. This is right in line with the past week's storage data, which showed current inventories at a surplus of 154 BCF to the 5 year average.
The market has turned around technically in the past few sessions with the weekly continuation chart now having momentum that has turned positive from an oversold condition. The spot futures bounced off the lower bollinger band on the DC chart early last week and the DC chart is showing a stepladder up pattern from the past 5 sessions after making the 9 1/2 month low last Monday. Momentum basis the weekly continuation chart has turned positive from an oversold condition. As one commentary reads:" Based on current conditions, natural gas leans cautiously bullish with a Buy bias, contingent on holding above $2.92". We see support at 2.922-2.929 basis the DC chart. Resistance lies above at 3.095-3.098.
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Disclaimer
This article and its contents are provided for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any commodity, futures contract, option contract, or other transaction. Although any statements of fact have been obtained from and are based on sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed.
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