Is the Weather Forecast Too Mild to Support Prices?
Latest weather models point to widespread cooling across the northern half of the U.S. through early September.
NatGasWeather reported comfortable highs in the 60s to 80s across the Midwest, Ohio Valley, and Northeast, reducing air conditioning demand. Southern regions, including much of Texas, are also seeing cooler-than-average readings.
Vaisala forecasts further cooling between September 4–8, extending from North Carolina to Northern California. These developments continue to undermine support for natural gas prices typically buoyed by late-summer heat.
Production at Record Highs Pressures Prices Further
Production remains a major headwind. U.S. lower-48 dry gas output hit 109.0 Bcf/day on Monday, up 6.3% year-over-year, according to BNEF. Active gas rigs held steady at 122 last week, just below the two-year high.
The EIA recently revised its 2025 production forecast higher to 106.44 Bcf/day, while the 2026 outlook now stands at 106.09 Bcf/day. Current output is already near record levels, compounding the impact of weak weather-driven demand.
Do LNG and Electricity Demand Offer Any Relief?
LNG flows provided a slight cushion, with net exports rising 13.5% week-over-week to 15.7 Bcf/day. Domestic power demand also showed strength. The Edison Electric Institute reported a 7.1% year-over-year rise in U.S. lower-48 electricity output for the week ended August 16. However, these pockets of demand have not been enough to offset bearish sentiment tied to weather and supply.