Natural Gas Update September 29,2025

Overview

Natural Gas- NG is down 4.0 cents at $3.166
NG futures are lower as the overall tone still seems to be one of slack demand and ample storage. This comes even as Celsius Energy is saying that the natural gas share of the power generation stack has risen.

Due to lower wind & coal generation, the natural gas share of the power generation has rebounded and is now essentially tied with last year for the 5-year high, as per Celsius Energy analysis.

U.S. domestic natural gas production is estimated today at 108.58 BCF/d compared to the 30-day average of 108.29 BCF/d, according to Bloomberg data.

Friday's expiration of the October NG futures contract was weak, as it settled down 6.9 cents, while the November contract gained 1.1 cents on the day.

Money managers raised their net short positioning quite a bit in the week ended Tuesday September 23 as per the CFTC report seen Friday. Net shorts rose by 39,998 contracts to 63,286 contracts. Long liquidation and more so new short positons were the cause. 

The Baker Hughes rig count seen Friday showed the gas count fell by 1 unit. The gas rig count is lowest since July 18. However, it is up 18 rigs, or 18.2% on the year, as per the Baker Hughes data.

Some natural gas producers in Western Canada are aggressively cutting output in an effort to ease an ongoing glut that this week tipped prices for the fuel into record negative territory, companies and analysts said. Analysts expect prices to remain under pressure as pipelines have become congested due in part to rising output from producers in Alberta and British Columbia, which has yet to be absorbed by a new liquefied natural gas export terminal. Gas storage in Western Canada remains essentially at last year's record highs, according to U.S. investment bank Jefferies, in part due to rising output from producers in anticipation of the export terminal.  "These are the worst sustained prices we've seen, and therefore our shut-ins will be the most aggressive," one producer said. "We're trying to make sure that we shut in every penny that we can to avoid paying the market to take away our otherwise valuable energy product.", he added.  (Reuters)

Asian spot LNG prices fell last week amid lackluster demand, with pressure set to continue due as healthy inventories and stronger domestic output in China limit spot buying, Reuters said. The average LNG price for November delivery into north-east Asia was $11.20/MMBtu,  down from $11.50/ MMBtu last week, industry sources estimated. The Northeast Asian price contrasts to the TTF/European November futures price today of $11.23/ MMBtu (=32.700 Euro/Mwh). In Europe, the gradual end of the maintenance season in Norway is lifting supply while strikes in France curb LNG deliveries. For the week ahead, Kpler maintains a stable outlook for the TTF front-month contract, as ample pipeline and LNG supply should help balance a gradual decrease of renewable generation and lower Algerian piped flows to the EU. The lack of competition from Asia has reduced the urgency to procure for winter amongst European market players. 

Technically there is a large rollover gap ---down to 2.944---from the expiration of the October futures from Friday. Today, the November contract bumped up against the DC chart upper bollinger band. That band lies at 3.168 . Momentum is positive, basis the DC chart with the big jump in spot futures with November now the spot contract. Support for the November futures lies at 3.051-3.056 and resistance at 3.267-3.270.

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