Last Week in Natural Gas
Natural gas bulls owned the week. The prompt contract ripped higher Tuesday and Wednesday as late-season warmth kept cooling demand alive past its usual September fade, lifting the front month to its highest level since early July before profit-taking into Friday trimmed the gain. Thursday’s September 24 EIA release printed a +53 Bcf injection for the week ending September 18, taking Lower-48 working gas to 3,351 Bcf. That leaves stocks 95 Bcf (+2.9%) above the 2021-25 average and 146 Bcf (-4.2%) below year-ago levels. The regional split sharpened the story: the Midwest (+25 Bcf) and East (+20 Bcf) carried the build while South Central added just +2 Bcf, a sign that Gulf Coast power and export demand soaked up nearly all of the region’s surplus. Supply added fuel, with Lower-48 output easing off recent highs while export demand held steady on firm overseas pull tied to Persian Gulf LNG disruptions. Overhead, the ONI printed +1.8 for June-August, extending a 0.95-to-1.39-to-1.8 climb and locking in a very strong El Niño heading into winter.
The Week Ahead
The week ahead tests whether the shoulder season finally shows up in the balance. October futures expire Monday, September 28, handing the prompt to November, and Thursday’s October 1 EIA release covers the week ending September 25, when late-season warmth was still pulling gas into power generation. Another modest build keeps the tail of injection season tight and supports the prompt. The bear case sits one step further out: October is the quietest demand month of the year, and injections should run heavy enough to widen the surplus over normal into the October 31 end of refill season. The curve already knows this. It stacks a steep winter premium through December and January, and that is where the fight lives. A record-strength El Niño argues for a mild northern-tier winter and a premium that is too full; a mid-winter polar-vortex disruption risk and firm export pull from Golden Pass, Corpus Christi Stage 3 and Plaquemines defend it. Watch Cove Point’s fall maintenance, which trims export demand into mid-October. Respect the tight tail, but fade prompt rallies into the shoulder overhang.
In Plain English
Natural gas prices climbed sharply last week, reaching their highest level since early July, as unusually warm late-September weather kept air conditioners running and U.S. gas production eased slightly. The country is still filling storage ahead of winter, and supplies sit a little above what’s normal for this time of year, though below last year’s levels. The bigger question is the coming winter. A very strong El Niño, a warming of Pacific Ocean waters that tends to bring milder winters to the northern United States, could keep heating demand in check. For households and businesses, that points to steady rather than soaring heating costs this winter, unless a sudden deep cold snap arrives in January.