US Natural Gas Inventories Beat Expectations
US natural gas inventories rose by 40 billion cubic feet, exceeding market forecasts and weighing on contract prices.
US natural gas inventories increased by 40 billion cubic feet in the week ended September 4. This figure exceeded the market expectation of 34 billion cubic feet. The surplus weighed on prices, with October Nymex contracts closing down by 0.11% on Friday.
Current storage levels stand at 4.8% above the five-year seasonal average. The US Energy Information Administration projects storage will reach 3,985 billion cubic feet by the end of October. This would mark the highest level in a decade.
Supply Data Exceeds Forecasts
The weekly EIA report indicated a 40 billion cubic feet increase in storage. Analysts had projected a 34 billion cubic feet gain. The actual build was below the five-year weekly average of 52 billion cubic feet. Despite the smaller build, the total supply remains adequate.
Lower-48 dry gas production reached 113.8 billion cubic feet per day on Friday. This represents a 4.4% increase compared to the same period last year. Demand from lower-48 states was 75.8 billion cubic feet per day, up 7.5% year-over-year. Data from Erdgas (Google News) highlights these production metrics as key drivers of the current supply environment.
Weather Patterns Influence Demand
Forecasters predict above-average temperatures across the South and Southeast through September 20. Warmer weather boosts electricity demand for air conditioning. This supports gas consumption by power plants, providing some underlying price support despite high inventories.
A potential Super El Niño event poses a medium-term risk. Warmer-than-normal temperatures in the Northern Hemisphere during fall and winter would reduce heating demand. This seasonal shift could further weigh on natural gas prices by lowering overall consumption.
Production Capacity Continues to Rise
Baker Hughes reported an increase of two active US natural gas drilling rigs. The total count rose to 132 rigs in the week ended September 11. This figure is close to the three-year high of 134 rigs recorded in February 2026.
The EIA raised its 2027 US dry natural gas production estimate to 116.0 billion cubic feet per day. The previous projection was 115.3 billion cubic feet per day. These updates reflect continued growth in domestic supply capabilities.
