Natural gas remains under pressure as storage outweighs LNG risks
Natural gas is trading around $2.89/MMBtu on September 11 after an attempted rebound from the $2.85 area, but pressure on the price remains. Yesterday’s EIA report was rather bearish for Henry Hub: inventories for the week through September 4 increased by 40 Bcf to 3.254 Tcf.
At the same time, the inventory structure remains uneven. East added 20 Bcf to 773 Bcf, Midwest another 18 Bcf to 908 Bcf, while South Central declined from 1.051 Tcf to 1.044 Tcf, and salt storage fell from 238 to 227 Bcf. In other words, the overall inventory level continues to rise, but the more flexible southern storage facilities still look noticeably tighter than the broader picture.
Seasonal supply pressure remains dominant
The September STEO also does not provide a strong argument for a sustained rise in the coming weeks. The EIA expects around 3.969 Tcf of gas in storage by October 31, which is 5% above the 2021–2025 average and 1% above the October 2025 level. At the same time, Mountain is expected to enter the withdrawal season around 21% above the five-year average, Pacific 10% above, Midwest 6% above, South Central 4% above, while East is expected to be roughly in line with the norm.
This increases the likelihood that until sustained heating demand begins, the market will continue to face pressure from the supply side. At the same time, LNG remains the main offsetting factor: U.S. 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 and 18.7 Bcf/d in the first half of 2027.
Hormuz disruptions keep external demand supported
The Middle East, by contrast, continues to support the global LNG premium. Shipping through the Strait of Hormuz remains heavily restricted: on September 10, only seven vessels crossed the strait versus an average of around 15 over the previous ten days. At the same time, some Qatari LNG cargoes are still getting through, pointing not to a complete halt in flows, but to extremely unstable logistics.
An additional risk comes from the situation around Qatar: its LNG exports remain seriously disrupted, while reports have even emerged of negotiations over possible purchases of U.S. gas. For Henry Hub, this is not a direct price catalyst, but the longer problems in the Strait of Hormuz persist, the stronger the incentive for Europe and Asia to maintain elevated demand for U.S. LNG.
$2.93 remains key recovery trigger
Nevertheless, the NATGAS rebound at this stage was capped by resistance around the $2.93 level, after testing which prices are once again trading below $2.90. However, as I noted in Natural gas extends decline as storage outlook keeps pressure on prices, taking the above factors into account, a break below $2.85 support and a larger decline look unlikely, so bulls may still break through $2.93 resistance, in which case a rise toward $2.96–3.00 should be expected.
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