Natural Gas Update September 16,2025

Overview

Natural Gas-NG is up 3.3 cents
NG futures are higher being boosted by a warmer forecast that signals more cooling demand for the end of the month. NG output is lower today, although it could be revised upward later in the day.

Lower 48 natural gas demand is estimated 0.760 BCF/d higher today at 73.64 BCF/d compared to an average of 70.48 BCF/d over the previous week and the five-year seasonal average of around 66.3 BCF/d. (Market News)

U.S. domestic natural gas production is estimated down at 106 BCF/d today from 108.83 BCF/d yesterday, according to Bloomberg data.

On Monday, NGI commentary said that :" natural gas futures and cash prices trended higher through early afternoon trading amid forecasts that advertised seasonally strong cooling demand this week."  The Henry Hub next day cash price rose to $3.00 on Monday. This was up 20 cents from the price seen last Thursday. This caused the futures premium to the cash price to shrink to flat from a premium of about 16 cents seen last Thursday. Some of Monday's rally may have also been about short covering with October open interest on the CME falling by over 17,000 contracts. Some of the drop in open interest may also be about the rolling of long positions to November by the UNG fund.

Notable trades in LN NG options seen Monday on the CME included the December $2.00 puts, which traded at a price of 0.6 cents, in what open interest from the CME shows was a closing trade. Additionally, the $4.75/$6.00 call spread traded in December in a 1 by 2.5 ratio, at a cost of 6.7 cents to the $4.75 call buyer, with delta December futures sales at $3.82. Open interest data from the CME shows this to be a trade that was initiated.

Initial estimates seen for this week's EIA gas storage data are calling for a build of 79 to 80 BCF. This is versus the 5 year average build of 74 BCF and last year's build of 56 BCF. If the estimates are correct, the deficit of 38 BCF to last year's inventories will almost be eliminated. Reuters analysis of gas storage provides a similar picture: U.S. natural gas inventories show no sign of tightening despite the start up of new LNG export facilities. Inventories were 205 BCF (+7%) above the ten-year seasonal average on September 5 which was basically unchanged from a surplus of 211 BCF (+9% ) at the start of the main air conditioning season on June 1.

Technically the DC chart still shows momentum to be negative, despite the 15 cent rally in the spot futures since Friday's close. Upside resistance comes in at 3.130-3.131 and then at 3.198-3.199. Support is likely at 3.008-3.014 and then at 2.960-2.964. Worth noting is the fact that the low of the overnight session is 2.869, which occurred on the opening of the session last night; but, basically price action overnight showed prices holding near $3.00 before rallying further since then.

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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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