Natural gas remains capped below $3.00 despite tighter storage data
Natural gas is trading around $3.00/MMBtu on September 18 after yesterday’s volatility and another move above the psychological $3.00 level. The main new factor was the EIA report: inventories for the week ending September 11 increased by only 44 Bcf to 3.298 Tcf, while the market had expected an injection of around 49–50 Bcf.
Inventories are now 122 Bcf below last year’s level, but still 118 Bcf, or 3.7%, above the five-year average. This significantly reduces the previous supply surplus and shows that hot weather and strong power-sector demand continue to limit the pace of injections.
Supply growth is increasingly offset by LNG demand
At the same time, the broader balance remains relatively comfortable. In its September forecast, the EIA expects around 3.969 Tcf of gas in storage by October 31, roughly 5% above the five-year average. Production also continues to rise: the EIA forecasts an increase in marketed production of around 4.5 Bcf/d in 2026, mainly driven by the Permian and Haynesville. On the other hand, exports are gradually absorbing the additional supply.
U.S. LNG exports were already up by around 23% y/y in the first half of the year, while on September 18 feedgas volumes again approached 18.1 Bcf/d after declining a day earlier. The completion of the Corpus Christi expansion is also increasing available export capacity, meaning that production growth is now being offset to a greater extent by external demand.
Middle East disruptions support the global gas market
The Middle East remains a separate supportive factor. Traffic through the Strait of Hormuz is still heavily disrupted, although at least several LNG tankers managed to pass through it this week, while suppliers continue to use unusual ship-to-ship operations off Oman.
The problem is not only logistical: around 17% of Qatar’s LNG production capacity remains offline after two trains were damaged, and repairs could take several years. QatarEnergy is already seeking long-term LNG supplies from the U.S. to compensate for the lost volumes. This supports the global gas market and increases the attractiveness of U.S. LNG, although a partial recovery in traffic through Hormuz could periodically reduce some of the geopolitical premium.
Bulls struggle to regain control above $3.00
After NATGAS pulled back to support around $2.96, bulls are trying to regain control, but all attempts to establish the price above the psychological $3.00 level have so far failed. As noted in Natural gas slips below $3 as storage and weather pressure build, this keeps the risk of a break below support and a decline toward $2.90–2.85 in place, although a more substantial drop appears unlikely at this stage.
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