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US Natural Gas Update: Futures Gain on Warm Weather Ahead of Inventory Data

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US natural gas futures maintained earlier gains in after-hours trade on Wednesday as warmer weather forecasts and strong LNG feedgas demand helped offset ample supplies as the market turned its focus to Thursday's Energy Information Administration storage report.

The front-month Henry Hub contract and continuous contract were both up 0.94% at $2.793 per million British thermal units.

Aegis Hedging said US temperatures had increased by about 3.2 degrees Fahrenheit over the forecast period, with modest warming expected in areas east of the Rockies. Power burn held at 49.1 billion cubic feet per day, while LNG feedgas demand rose to 18.6 Bcf/d, helping absorb much of the available supply and keeping the daily balance from becoming sharply loose.

Aegis said Sabine Pass accounted for much of the increase in LNG feedgas demand, with flows rising by about 700 million cubic feet per day. A planned Creole Trail pipeline outage from Aug. 25-28 is expected to reduce gas flows to Sabine Pass by roughly 150 MMcf/d, while Freeport LNG is expected to return to normal operating rates in late August.

US natural gas production remained elevated at 111.5 Bcf/d, while Canadian imports stood at 5.6 Bcf/d, putting total current supply at 117.2 Bcf/d, according to Gelber & Associates.

Even stronger production is forecast. EIA said Wednesday that US natural gas output is expected to reach a record 122.5 Bcf/d in 2026, up from 118.5 Bcf/d in 2025. First-half production averaged 121.3 Bcf/d, up 4% from a year earlier, driven by growth in the Permian and Haynesville regions.

Permian production is forecast at 29.2 Bcf/d, up 6%, with much of the increase coming from gas produced alongside crude oil.

Market attention is now squarely on Thursday's EIA weekly storage report, with analysts expecting another sizable injection that could underscore the market's ample supply cushion.

Barchart expects the EIA to report a 31 Bcf increase in US natural gas inventories for the week ended Aug. 7, slightly below the five-year average injection of 33 Bcf for the comparable week. Analysts polled by the Wall Street Journal see a 30 Bcf injection, which would narrow the inventory surplus over the five-year average to 192 Bcf from 195 Bcf.

The expected injection comes as inventories already stand 6.7% above the five-year seasonal average. The EIA on Tuesday projected that US natural gas storage would reach 3,985 Bcf by the end of October, the highest end-October level in a decade and 5% above the five-year average.

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