Natural gas holds near $3.00 as export demand strengthens outlook

Traders Union
All News
Commodities
LNG demand supports natural gas outlook

Storage structure shifts ahead of new EIA outlook

The latest storage data confirm that the absolute volume of gas in inventories remains high, but the regional structure is gradually changing. For the week ending August 28, total stocks rose to 3.214 Tcf, while South Central declined to 1.051 Tcf and salt cavern inventories fell to 238 Bcf. This is important because fast-cycle storage in South Central is used to balance peak demand and LNG flows.

The next EIA storage report will be released on September 10, while on September 9 the agency will publish its new Short-Term Energy Outlook, giving the market two important reference points for storage build rates and the price outlook. In the August STEO, the EIA expected inventories of around 3.985 Tcf by the end of October and Henry Hub to remain below $3 through November, but these estimates may be revised after weaker injections in recent weeks.

LNG exports become more important for U.S. balance

A more interesting factor now is exports. The EIA reported that U.S. LNG exports increased by 23% y/y to 17.4 Bcf/d in the first half of 2026 thanks to the expansion of Plaquemines, Corpus Christi Stage 3 and the launch of Golden Pass. For the second half of the year, the agency expects around 17.3 Bcf/d, rising to 18.7 Bcf/d in the first half of 2027.

This means that even with record production, the domestic balance is becoming increasingly dependent on export demand. At the same time, the global price gap remains huge: Asian JKM was trading around $24/MMBtu at the end of the week, TTF around €72/MWh, while Henry Hub remained below $3. Such a spread continues to make U.S. LNG extremely competitive.

Hormuz risks keep upside scenario alive

The Middle East remains the key external risk. Despite the June agreement between the U.S. and Iran and a partial recovery in traffic through the Strait of Hormuz, LNG transit volumes are still significantly below pre-war levels, while supplies from Qatar and the UAE are recovering only gradually. At the same time, Europe is entering the heating season with storage levels around 65.6%, the lowest for this time of year in the entire available historical series, increasing the likelihood of more aggressive competition for U.S. cargoes during the winter.

Therefore, the current NATGAS picture looks moderately bullish: high inventory levels and strong production continue to limit the upside, but export utilization, weak European storage levels and the persistent risk of disruptions in the Strait of Hormuz make a return above $3.00 more likely than it was a few weeks ago, and in that case a break above resistance near $3.07 and a move toward $3.15–3.20 should be expected.

A loss of support around $2.95 would increase the risk of a break below $2.90 and a decline toward $2.80–2.75, but given the current situation with gas inventories in Europe, as I noted in Natural gas slips below $3.00 as failed breakout revives downside risks, such a scenario looks unlikely at this stage.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.