Storage levels remain robust across all regions, with the South Central posting a modest 4 Bcf increase. The East and Midwest both added 28 Bcf, while the Pacific region saw a rare draw of 4 Bcf. The Mountain region was flat. While the report didn’t surprise, it underlines that the supply-demand balance remains tilted toward surplus.

How Is Weather and Demand Playing Into Price Action?

Recent gains in natural gas were driven by forecasts for above-normal temperatures in the Midwest and Northern U.S. during the September 8–17 period. However, the near-term forecast (Sep 2–8) shows mild conditions across key demand regions, including the Midwest and Southeast, capping electricity-driven gas demand this week.

U.S. power output, however, has been a supportive factor. According to the Edison Electric Institute, electricity generation rose 7.7% y/y for the week ending August 23, contributing to firm cooling demand. Even so, it’s unclear how much of this is already priced in given near-record gas production.

Is Surging U.S. Production Overpowering Bullish Setups?

U.S. dry gas production remains near record highs, holding at 105.7 Bcf/day, up 3.3% y/y. LNG feedgas demand came in at 15.0 Bcf/day, slightly down week-over-week. Meanwhile, active U.S. natural gas rigs declined by three to 122 last week, just below the two-year high of 124 reached in early August. Although rig counts dipped, elevated output continues to weigh on any bullish momentum, especially as inventories remain healthy and demand has not spiked.

Where Are Prices Headed Next?