Fading Heat and Rising Storage Deficits: Natural Gas Futures Face Challenges

Natural gas futures are struggling to maintain their value as demand is expected to plummet in late September. Prompt month natural gas futures have edged downward in early Wednesday trade, weighed down by a waning demand outlook for late September.

This decline is driven by the fact that heat is fading, and with it, the need for cooling. As a result, LNG feedgas is well above its recent pace, which could further reduce demand for natural gas.

However, one factor providing support to natural gas prices is the year-over-year storage deficit. This suggests that there may be sufficient demand for natural gas in the near term, despite the anticipated decline in cooling needs.