US natural gas prices surge 13% as colder weather boosts demand, spurring short covering

ReutersOct 20, 2025 7:29 PM

Speculative short covering contributes to price surge, analysts say
LNG export flows near record highs, boosting demand
Colder weather forecast boosts heating demand
Lower 48 states see decline in gas output
Gas storage levels 4% above normal, easing supply concerns

By Scott DiSavino

Oct 20 (Reuters) - U.S. natural gas futures jumped 13% to a one-week high on Monday, due to near-record flows to liquefied natural gas export plants and forecasts for much colder weather and higher heating demand over the next two weeks than previously expected.

Traders said speculators rushed to cover short positions after prices had fallen last week to a two-week low.

Front-month gas futures for November delivery NGc1 on the New York Mercantile Exchange rose 38.9 cents, or 12.9%, to settle at $3.397 per million British thermal units (mmBtu), their highest close since October 7.

That was the biggest daily percentage gain since prices rose about 15% on September 29.

Over the weekend, meteorologists adjusted their two-week weather forecast to mostly near-normal through November 4 from mostly above-normal through November 1.

"While these weather views don’t appear appreciably changed from Friday, it took only a modest change during the past couple of days to prompt what is likely a substantial amount of speculative short covering," analysts at energy advisory firm Ritterbusch and Associates said in a note.

"Although the weekly release of the COT (Commitments of Traders) report has been sidelined by the government shutdown, it is fair to assume that the price decline of the past couple of weeks has pushed net spec (speculative) short positioning further into the bullish column in partially explaining today’s sharp price advance," Ritterbusch added.

In the tropics, the U.S. National Hurricane Center projected a tropical wave in the Caribbean Sea had a 80% chance of strengthening into a tropical cyclone as it moves west toward Central America over the next week. The system is not expected to reach the U.S. mainland during that time.

Even though storms can boost U.S. 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

LSEG said average gas output in the Lower 48 states fell to 106.6 billion cubic feet per day so far in October, down from 107.4 bcfd in September and a record monthly high of 108.0 bcfd in August.

Record output earlier this year allowed energy companies to inject more gas into storage than usual. There is currently about 4% more gas in storage than normal for this time of year. EIA/GAS NGAS/POLL

With the weather turning colder, LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 101.5 bcfd this week to 105.5 bcfd next week. Those forecasts were higher than LSEG's outlook on Friday.

The average amount of gas flowing to the eight big U.S. LNG export plants rose to 16.4 bcfd so far in October, up from 15.7 bcfd in September and a monthly record high of 16.0 bcfd in April.

	Week ended Oct 17 Forecast	Week ended Oct 10 Actual	Year ago Oct 17	Five-year average Oct 17
U.S. weekly natgas storage change (bcf):	+74	+80	+79	+77
U.S. total natgas in storage (bcf):	3,795	3,721	3,774	3,644
U.S. total storage versus 5-year average	+4.1%	+4.3%


Global Gas Benchmark Futures ($ per mmBtu)	Current Day	Prior Day	This Month Last Year	Prior Year Average 2024	Five-Year Average (2019-2023)
Henry Hub NGc1	3.21	3.01	2.58	2.41	3.52
Title Transfer Facility (TTF) TRNLTTFMc1	10.83	10.89	12.89	10.95	15.47
Japan Korea Marker (JKM) JKMc1	11.15	11.20	13.35	11.89	15.23


LSEG Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days
Two-Week Total Forecast	Current Day	Prior Day	Prior Year	10-Year Norm	30-Year Norm
U.S. GFS HDDs	164	118	105	174	177
U.S. GFS CDDs	32	38	52	32	26
U.S. GFS TDDs	196	156	157	206	203

LSEG U.S. Weekly GFS Supply and Demand Forecasts
	Prior Week	Current Week	Next Week	This Week Last Year	Five-Year (2020-2024) Average For Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production	106.7	106.8	107.2	101.9	98.1
U.S. Imports from Canada	7.3	7.3	7.1	N/A	7.4
U.S. LNG Imports	0.0	0.0	0.0	0.0	0.0
Total U.S. Supply	114.0	114.1	114.2	N/A	105.5

U.S. Demand (bcfd)
U.S. Exports to Canada	2.2	2.3	2.2	N/A	2.2
U.S. Exports to Mexico	6.5	6.5	6.7	N/A	6.1
U.S. LNG Export Feedgas	16.8	16.8	17.0	13.1	11.3
U.S. Commercial	5.9	6.7	8.0	6.4	6.9
U.S. Residential	6.2	7.6	10.3	7.0	7.1
U.S. Power Plant	33.0	31.5	30.7	34.1	31.7
U.S. Industrial	22.2	22.7	23.0	22.3	22.4
U.S. Plant Fuel	5.3	5.3	5.3	5.3	5.2
U.S. Pipe Distribution	2.0	2.0	2.1	2.0	2.8
U.S. Vehicle Fuel	0.1	0.1	0.1	0.1	0.2
Total U.S. Consumption	74.7	75.9	79.6	77.2	76.3
Total U.S. Demand	100.2	101.5	105.5	N/A	95.9

N/A is Not Available

U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam (Fiscal year ending Sep 30)	2026 Current Day % of Normal Forecast	2026 Prior Day % of Normal Forecast	2025 % of Normal Actual	2024 % of Normal Actual	2023 % of Normal Actual
Apr-Sep	97	95	76	74	83
Jan-Jul	93	90	78	76	77
Oct-Sep	90	88	80	77	76

U.S. weekly power generation percent by fuel - EIA
	Week ended Oct 24	Week ended Oct 17	2024	2023	2022
Wind	12	11	11	10	11
Solar	7	7	5	4	3
Hydro	5	5	6	6	6
Other	1	1	1	2	2
Petroleum	0	0	0	0	0
Natural Gas	40	41	42	41	38
Coal	17	17	16	17	21
Nuclear	18	18	19	19	19

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub	Current Day	Prior Day	This Month Last Year	Prior Year Average 2024	Five-Year Average (2019-2023)
Henry Hub NG-W-HH-SNL	2.65	2.82	2.19	2.19	3.49
Transco Z6 New York NG-CG-NY-SNL	1.88	2.00	1.64	1.98	3.29
PG&E Citygate NG-CG-PGE-SNL	2.73	3.62	3.72	3.04	5.47
Eastern Gas (old Dominion South) NG-PCN-APP-SNL	1.73	1.88	1.53	1.68	2.77
Chicago Citygate NG-CG-CH-SNL	2.22	2.43	2.01	2.00	3.41
Algonquin Citygate NG-CG-BS-SNL	2.02	2.18	1.80	2.88	4.27
SoCal Citygate NG-SCL-CGT-SNL	2.27	3.13	2.60	2.47	5.92
Waha Hub NG-WAH-WTX-SNL	0.50	1.07	0.59	0.77	2.91
AECO NG-ASH-ALB-SNL	0.59	1.12	0.77	0.96	2.28

ICE U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub	Current Day	Prior Day	This Month Last Year	Prior Year Average 2024	Five-Year Average (2019-2023)
New England E-NEPLMHP-IDX	43.50	34.20	40.14	47.35	48.44
PJM West E-PJWHRTP-IX	49.63	43.56	41.96	41.98	45.33
Mid C W-MIDCP-IDX	52.79	39.74	55.48	63.89	61.73
Palo Verde W-PVP-IDX	15.25	16.75	45.83	39.50	62.42
SP-15 W-SP15-IDX	22.37	20.26	35.86	31.30	58.87

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