Natural Gas Holds Above $3.00 as LNG Demand and Geopolitical Risks Support Prices
Natural gas prices hovered around $3.16-3.17 per MMBtu on October 5, recovering from a dip to $3.03-3.05 earlier. The 4-hour chart shows the price moving back above short-term moving averages, while the longer-term average remains near $3.00, maintaining a slightly bullish medium-term outlook.
The latest EIA report revealed a 64 billion cubic feet (Bcf) increase in inventories for the week ending September 25, bringing total stocks to 3.415 trillion cubic feet (Tcf). This is 3.9% below last year’s level but 2.4% above the five-year average, suggesting a comfortable supply situation. The EIA forecasts inventories to reach around 3.969 Tcf by the end of October, roughly 5% above the five-year average. However, higher production continues to offset strong export demand, exerting downward pressure on prices.
Exports remain a key supportive factor, with feedgas to U.S. LNG terminals holding near 18.2 Bcf per day in early October, a high level despite maintenance at some facilities. This indicates that much of the additional production is being absorbed by external demand. If LNG feedgas continues to rise and colder weather arrives, the market could reassess winter supply expectations, even with current comfortable inventory levels.
Geopolitical risks also support gas prices, as LNG flows through the Strait of Hormuz have only partially recovered. Any renewed disruption in the Persian Gulf could boost demand for alternative LNG from the U.S., potentially restoring a risk premium to prices. While high inventories and strong production limit upside potential, exports, seasonal transitions, and geopolitical risks keep natural gas above $3.00, preventing sellers from regaining full control. Resistance around $3.30-3.40 may cap further upside in the near term, but a break above this level could strengthen bullish momentum and push prices toward $3.60-3.70.