Gas Prices Hold Above $3.00 as Demand and Production Remain Strong

Natural gas prices have been on the rise, and Thursday's EIA report is set to provide further insight into the market. Lower-48 gas demand has increased by 7.6% from a year ago, reaching an estimated 79.5 Bcf per day. This growth in demand, coupled with strong production levels of around 112 to 115 Bcf per day, is putting pressure on storage facilities.

The EIA's forecast for 2027 production has been raised to 116.0 Bcf per day, while storage is expected to reach a record high of 3,985 Bcf by the end of October. However, analysts are expecting this week's report to show a relatively modest withdrawal of 29 Bcf, which would be below the five-year average.

The market has been reacting positively to the heat and feedgas levels near 19.6 Bcf per day, with prices holding above $3.00. This has led some traders to believe that the export bid is not fading at its normal seasonal pace, despite European storage being near 65% full.