Natural Gas Prices Struggle Amid Storage Build and Heavy Supply

Natural gas prices struggled to recover from a storage report that showed a 33 Bcf injection, despite forecasts of hot weather across much of the country. NatGasWeather predicts highs in the upper 80s to 110s over the next seven days, which should lift cooling demand and gas-fired power burn.

However, the storage number stopped the bid before it could build, and cash prices reflected this with heavy losses in New England on Friday delivery. The market is treating this heat as temporary until it holds across the Midwest and Northeast long enough to change storage math.

The supply side remains a concern for buyers, with production at 111.2 Bcf per day Thursday, up 1.8% from a year ago. The Hugh Brinson pipeline reaching full capacity at 1.5 Bcf per day on September 1 makes the calendar worse for buyers, and more Permian gas arrives at Henry Hub just as the summer cooling season starts to fade.

Despite this, LNG feedgas hit 18.5 Bcf per day Thursday, up 3.3% from the prior week, and European storage is well below the five-year average heading into winter. The export bid remains real, but it may not be enough to offset the heavy supply side.