Last Week in Natural Gas
After the prior week’s brutal 5%-plus flush, the front month steadied and clawed back a modest weekly gain, with the September contract finishing near $2.77. The bounce was heat-driven and temporary: late-August cooling demand re-fired powerburn early in the week before rolling back over as the Midwest and Northeast eased, even with Houston baking near 100F August 20-23. Builds kept printing lean — inventories sat at 3,153 Bcf after a +36 Bcf injection for the week ending August 7, with the recent pace running several Bcf under the five-year norm. The story remains the back of the curve. January poked above $4.00 midweek, then slipped back under and bled through Friday as a record-strength Super El Niño — ONI at +1.39 and accelerating — pushed a warm-leaning winter into the official base case across much of the Lower 48. An El Niño-suppressed Atlantic, still hurricane-free and below-normal, stripped any Gulf disruption premium out of the prompt. Only firm European prices and the tightest EU refill since 2013 kept an export floor under the strip.
The Week Ahead
The calendar does the heavy lifting this week. Thursday’s EIA release should show another below-normal injection — builds are tracking in the mid-to-high 20s Bcf against a five-year average up near the mid-30s, a lean print that flatters the prompt without changing the surplus math into winter. The September contract rolls off the board late in the week, so expect thin, roll-driven chop as positioning shifts into October and the soft shoulder takes over. Watch the updated seasonal temperature outlook: any hardening of the warm-winter lean gives the Dec/Jan bid still more to fade, while a stratospheric-warming or polar-vortex signal for January is the one wildcard that flips the tape. The Atlantic climbs toward its September 10 peak — a quiet basin keeps risk premium absent, but that window stays live. On exports, feedgas is grinding higher as Golden Pass and Plaquemines ramp; utilization below nameplate leaves headroom for the LNG bid to firm. Spot leans on fading heat; the curve keeps discounting a warm, well-supplied winter.
In Plain English
Natural gas prices firmed up a little last week, recovering from a sharp drop the week before as a last blast of late-summer heat kept demand for air conditioning high. But the bigger picture points lower: a strong El Niño weather pattern — which typically brings milder US winters — has forecasters expecting a warmer-than-normal heating season. That matters because gas is mostly used for heat in winter, so a mild one means weaker demand. Storage tanks are also fuller than usual for this time of year. The one thing that could change the story is a sudden cold snap, but for now the market is betting on a comfortable, well-supplied winter ahead.