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US Natural Gas Update: Futures Fall on Cooler Forecasts

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US natural gas futures dropped in late trading on Monday as cooling weather forecasts reduced demand while production hit record levels and inventories swelled.

The front-month Henry Hub contract as well as the continuous contract both lost 1.06% to trade at $2.704 per million British thermal units.

Barchart said natural gas prices fell to a one-week low Monday as US weather forecasts shifted toward cooler conditions, potentially reducing demand from power generators for air conditioning.

While NatGasWeather.com said the southern US would experience hotter-than-normal weather, The Commodity Weather Group said Monday that the US weather outlook had shifted toward cooler conditions, with average to below-average temperatures expected across the eastern population centers of the US from Aug. 22-31.

Lingering heat across the southern US and recovering LNG feedgas demand continue to provide some support, but they have not been enough to overcome high production and comfortable inventories, Gelber & Associates said.

On the supply side, Barchart, citing BNEF data, said lower 48 dry gas production was 114.1 Bcf/d, up 4.1% from output a year ago. That compares with a demand of 82.5 Bcf/d, up 5.1% over the year. The latest US Energy Information Administration inventory data showed stock levels at nearly 200 Bcf above the five-year average.

Estimated LNG net flows to US LNG export terminals were 18.9 Bcf/day Monday, up 2.3% from the previous week as maintenance work continues at Freeport LNG.

With less of the cooling season remaining for weather to meaningfully tighten balances, the market continues to discount the risk of adequate supply heading into winter, putting disproportionate pressure on Winter 2026-27 pricing, Gelber & Associates said.

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