US natgas climb 3% to one-week high on stronger demand ahead of storage report

By Scott DiSavino

Sept 25 (Reuters) - U.S. natural gas futures climbed about 3% to a one-week high on Thursday on forecasts for more demand over the next two weeks than previously expected.

On its second-to-last day as the front-month, gas futures for October delivery NGc1 on the New York Mercantile Exchange rose 9.6 cents, or 3.4%, to $2.954 per million British thermal units (mmBtu) at 9:16 a.m. EDT (1316 GMT), putting the contract on track for its highest close since September 17.

Futures for November NGX25, which will soon be the front-month were up about 4% to $3.25 per mmBtu.

That price increase came ahead of the release of a federal storage report expected to show energy firms injected a near-normal 74 billion cubic feet (bcf) of gas into storage during the week ended September 19.

That compares with an increase of 49 bcf during the same week last year and an average build of 76 bcf over the past five years. EIA/GAS NGAS/POLL

In the cash market, prices at the Waha Hub NG-WAH-WTX-SNL in West Texas and the AECO Hub NG-ASH-ALB-SNL in Alberta remained in negative territory because pipelines in both regions were constrained due to maintenance and other reasons.

For the Waha, that was the 11th time this year prices traded in negative territory.

At AECO, Tuesday was the first time prices averaged below zero at minus 5 cents per mmBtu, Wednesday was the second at minus 18 cents and Thursday was the third at minus 44 cents, putting the contract at a record low for three days in a row, according to LSEG pricing data.

That compares with an average at AECO of $1.02 per mmBtu so far in 2025, 96 cents in 2024, and an average of $2.28 over the prior five years (2019-2023).

Traders have noted that pipelines in Alberta have become congested due in part to rising output from producers in Alberta and British Columbia in anticipation of rising demand for Canadian gas from the startup of the first 0.9-bcfd liquefaction train at the LNG Canada export plant in British Columbia.

That startup, however, was delayed by over a year, with LNG Canada sending out its first cargo this summer.

In the tropics, the U.S. National Hurricane Center projected Tropical Storm Humberto would strengthen into a hurricane as it moves west and then northwest through the Atlantic Ocean between Puerto Rico and Bermuda without hitting land over the next week.

The NHC also said a tropical wave over the Bahamas had a 90% chance of strengthening into a tropical cyclone over the next seven days.

Neither system was expected to enter the Gulf of Mexico at this time.

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 fall to a preliminary 11-week low of 106.3 bcfd on Thursday. That compares with an all-time daily high of 109.7 bcfd on July 28. Preliminary data is often revised later in the day.

LSEG projected average gas demand in the Lower 48 states, including exports, would slide from 105.6 bcfd this week to 102.7 bcfd next week. Those forecasts were higher than LSEG's outlook on Wednesday.