Natural gas builds support above $3.00 as LNG risks tighten outlook

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Natural gas holds above key support

Storage picture remains tighter beneath headline levels

The fundamental backdrop remains mixed. According to the latest EIA data, natural gas inventories in the Lower 48 rose to 3.214 Tcf in the week ending August 28. But the regional picture once again stands out: South Central declined to 1.051 Tcf, while salt storage fell to 238 Bcf, continuing to decrease for several consecutive weeks. This means that the high overall level of inventories is masking a tighter situation in the most flexible storage facilities, which are particularly important for balancing LNG exports and peak demand.

The next storage report will be released on September 10, while the EIA will publish its new STEO on September 9. The August forecast assumed an average Henry Hub price of around $2.87 in the third quarter and the highest pre-winter inventories in a decade, so any changes to these estimates could have a noticeable impact on the market.

Global price gap keeps U.S. LNG attractive

The external factor also remains supportive for buyers. U.S. LNG exports increased by 23% y/y to 17.4 Bcf/d in the first half of 2026, while the EIA expects around 17.3 Bcf/d in the second half of the year, followed by further growth to 18.7 Bcf/d in the first half of 2027. At the same time, the European market remains extremely tight: storage facilities are only around 65–66% full, while TTF is trading around €74/MWh.

Additional pressure on supply comes from the ongoing restriction of Qatari deliveries, including the extended force majeure on certain European contracts. As a result, the wide price gap between Henry Hub and the European market continues to support maximum utilization of U.S. export capacity.

Hormuz uncertainty keeps upside scenario active

The Middle East remains the main source of the risk premium. LNG flows through the Strait of Hormuz have still not returned to normal levels after the summer disruptions, while the European market is entering the heating season with the lowest storage levels for this time of year in the available historical series.

Therefore, even with strong U.S. production and high overall inventories, the market is increasingly treating $3.00 as less of a ceiling. As long as the price holds above $3.00, the base case remains moderately bullish, with targets around $3.07–3.15; only a return below $2.95, as I warned in Natural gas holds near $3.00 as export demand strengthens outlook, would significantly increase the probability of a deeper correction toward $2.90–2.85.

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