US natgas prices gain 2% to 8-week high as demand rises

By Scott DiSavino

Sept 17 (Reuters) - U.S. natural gas futures climbed about 2% to an eight-week high on Wednesday on lower daily output in recent days and forecasts for more demand over the next two weeks than previously expected.

Front-month gas futures for October delivery NGc1 on the New York Mercantile Exchange rose 4.52 cents, or 1.5%, to $3.148 per million British thermal units (mmBtu) at 8:55 a.m. EDT (1255 GMT), putting the contract on track for its highest close since July 22.

In the spot market, meanwhile, gas prices at the Waha Hub NG-WAH-WTX-SNL in the Permian shale in West Texas fell into negative territory for a second time this week as pipeline maintenance, like work on Kinder Morgan's KMI.N El Paso Pipeline from Texas to California, trapped gas in the nation's biggest oil-producing basin.

That was the seventh time Waha prices have dropped below zero so far this year and compares with an average of $1.64 per mmBtu in 2025, 77 cents in 2024, and $2.91 over the previous five years (2019-2023).

Waha prices first averaged below zero in 2019. It happened 17 times in 2019, six times in 2020, once in 2023, and a record 49 times in 2024.

In the tropics, the U.S. National Hurricane Center said Tropical Depression Seven in the central Atlantic would likely strengthen into a hurricane over the next week as it moves northwest toward Bermuda. The system is not expected to reach the U.S. mainland over the next seven days.

Even though storms can boost gas prices by cutting output along the U.S. Gulf Coast, they are more likely to reduce prices by shutting LNG export plants and knocking out power to homes and businesses. About 40% of the power generated in the U.S. comes from gas-fired plants.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 states fell to 107.4 billion cubic feet per day so far in September, down from a record monthly high of 108.3 bcfd in August.

On a daily basis, output was on track to drop to a preliminary two-month low of 106.0 bcfd on Wednesday due mostly to pipeline maintenance and other declines in Texas, West Virginia and Pennsylvania. That, however, is a smaller drop than expected on Tuesday. Preliminary data is often revised later in the day.

Record output earlier this year allowed energy companies to inject more gas into storage than usual so far this summer. There was about 6% more gas in storage than normal for this time of year, and analysts expect that percentage to mostly grow in coming weeks. EIA/GAS NGAS/POLL

Meteorologists forecast the weather will remain warmer than normal through at least October 2.

That late season heat, however, will not necessarily increase gas demand by much since it is more likely to reduce the usual increase in heating demand seen at this time of year rather than boost the amount of gas power generators burn to keep air conditioners humming.

LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 102.6 bcfd this week to 103.4 bcfd next week. Those forecasts were higher than LSEG's outlook on Tuesday.

The average amount of gas flowing to the eight big U.S. LNG export plants eased to 15.7 bcfd so far in September, down from 15.8 bcfd in August. That compares with a monthly record high of 16.0 bcfd in April.

In other LNG news, Berkshire Hathaway Energy's 0.8-bcfd Cove Point plant in Maryland is scheduled to shut soon for about a month of planned annual autumn maintenance.