• Natural Gas Market Indicators

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Natural Gas Market Summary

The balance between robust production, steady exports, and temperatures will shape whether the U.S. natural gas market can maintain its record-setting momentum through the upcoming winter heating season. Despite a brief dip in production in early October, natural gas supply continues to hold strong above year-ago levels, supporting domestic and global demand as the winter heating season commences. After falling to 1.7 Tcf (nearly 12 percent below the five-year average) in March 2025, rapid storage refills during the injection season appear to have lifted underground storage inventories 4.6 percent above five-year average levels to 3.9 Tcf by late October, according to preliminary data from the Energy Information Administration (EIA).

In the global market, abundant U.S. natural gas continues to drive record LNG export activity. Preliminary data from Rystad Energy shows that feedgas deliveries reached an all-time high of 17.5 Bcf per day on October 26, surpassing the previous record set in April by 1.2 percent as new liquefaction projects ramp up operations. According to the Swiss Federal Office of Energy, U.S. LNG exports have been vital for the European Union, which saw storage inventories fall to just 33.6 percent of total capacity in late March following the 2024–2025 winter. As of October 24, European storage stands at 82.4 percent full, positioning the region well ahead of peak winter demand.

Futures Prices, Regional Prices Vary

The November 2025 Henry Hub futures contract settled at $3.38 per MMBtu on October 29, the contract’s expiry, down 2.1 percent week-over-week, according to data from CME. Despite this recent decrease, prices have risen 3.3 percent from $3.27 per MMBtu since the October prompt-month rollover on September 29. The price appreciation largely reflects growing bullish sentiment ahead of the winter heating season, though expectations for warmer-than-normal weather in the first half of November have tempered momentum.

In the longer term, contract prices have shown a more bearish tone. Since August 1, November, December, and January contract settlement prices have declined by an average of 7 percent, reaching minimum prices for the period on October 16. As the November contract neared expiration, the premium between the prompt month and December and January contracts gradually narrowed.

Trends in the spot market tell a different story. The EIA reports that Henry Hub spot prices have fallen 7.7 percent, from $3.10 per MMBtu on October 1 to $2.99 per MMBtu on October 20. Additional data from Argus shows that between October 16 and 24, average prices ranged from $1.80 per MMBtu in the Southwest to $3.08 per MMBtu in Louisiana Southeast, a spread of roughly $1.28 per MMBtu. Regional prices are trading within a $0.09 premium to a $1.19 discount to the Henry Hub. These wide ranges underscore that localized weather patterns, infrastructure constraints, and early heating demand may have a significant effect on short-term price dynamics, even as the overall market remains well-supplied.

A Warm Start to the Winter Heating Season

For the week ending October 25, temperatures in the U.S. were 58.3 percent colder than last year but 8.4 percent warmer than the 30-year normal, according to population-weighted heating degree days (HDDs). Month to date, temperatures in the U.S. have been about 10 percent colder than last year but 29 percent warmer than normal. Through November 12, the National Oceanic and Atmospheric Administration (NOAA) predicts above-normal temperatures for the majority of the U.S., with probabilities reaching the 70 to 80 percent range in much of the Midwest and Southwest. Temperatures in New England and the western portion of Alaska are expected to be near normal during this time.

NOAA’s National Hurricane Center (NHC) is monitoring Hurricane Melissa in the Atlantic. Melissa made landfall in Jamaica and eastern Cuba earlier this week as a Category 5 storm with devastating winds and flooding. The Market Indicators team wishes for the safety and well-being of the families and communities affected by the storm.

Domestic Demand up for Month to Date

According to preliminary data from S&P Global Commodity Insights (S&P Global), total demand, including exports, for the month to date through October 30, is up 1.9 percent compared to the same period last month and 7.7 percent higher than last year. Domestic consumption increased by 1.9 percent month-over-month and 3.6 percent year-over-year through October 30, driven by demand gains in the residential and commercial sectors. Meanwhile, power sector demand through October 28 lagged the previous month by 1.2 percent and year-ago levels by 2.5 percent, according to data from Rystad Energy.

Production Holds Strong

Despite a short-term dip in production in early October, natural gas supply remains well above year-ago levels. For the week ending October 30, preliminary data from S&P Global suggests that production is up 2.7 percent compared to 2024 output and increased 0.5 percent relative to last week’s average. According to Rystad Energy, production for the month is expected to reach 108 Bcf per day, only 0.4 percent below the all-time monthly high set in June 2025.

Feedgas Flows Surpass April Record

Thirty-two LNG vessels with a combined carrying capacity of 122 Bcf departed the U.S. between October 16 and 22, according to shipping data from Bloomberg Finance, L.P. Relative to last week, the number of departing ships from the U.S. and total carrying capacity remained flat.

Over the same period, LNG feedgas flows averaged 16.8 Bcf per day, 24.7 percent higher than the same week in 2024, according to data from Rystad Energy. Capacity ramp-ups at liquefaction facilities such as Plaquemines, Corpus Christi, and Calcasieu Pass have supported strong year-over-year growth. Between October 1 and 29, average feedgas deliveries at these terminals increased over the same period in September by 12.2 percent, 13.8 percent, and 6.8 percent, respectively. Sabine Pass has also shown month-to-date growth, with flows rising 5.2 percent. Expansion has supported new feedgas records above the previous April 9, 2025, high of 17.3 Bcf per day. On October 23 and 25, flows reached 17.4 Bcf, climbing again on October 26 to a new record of 17.5 Bcf per day.

Pipeline Flows Soft into Late October

October pipeline flows have followed a similar pattern to the trends observed in September 2025. Through October 30, natural gas imports from Canada fell 0.8 percent compared to the previous month and 17.4 percent over the same period last year, according to preliminary data from S&P Global. By comparison, exports to Mexico are down 4.4 percent compared to the prior month but nearly 4 percent higher year-over-year.

Gas Rig Count Flat for Week

According to Baker Hughes, the number of natural gas rigs in the U.S. remained flat at 121 week-over-week for the week ending October 24. Compared to the same week last year, the number of gas rigs is up nearly 20 percent. The oil rig count increased by two for the week to 420 but remained 12.5 percent below year-ago levels.

Storage Inventories Near the Five-Year Maximum

For the week ending October 24, total working gas in underground storage for the lower 48 increased by 1.9 percent to 3,882 Bcf, according to the EIA’s Weekly Natural Gas Storage Report. Inventories now stand 4.6 percent above the five-year average and are 0.8 percent higher than year-ago levels. Storage inventories for the week are 1.7 percent below the five-year maximum of 3,950 Bcf—the narrowest reported deficit since the week ending January 3, 2025, when working gas stocks were 0.1 percent below the five-year peak ahead of the January Polar Vortex and Winter Storm Enzo.

As the winter heating season begins, strong storage levels will play a critical role in meeting regional heating demand. Local storage facilities will be essential as temperature patterns diverge across regions. All storage regions are currently above their respective five-year averages, ranging from 0.6 percent in the Midwest to 19.2 percent in the Mountain region. According to the EIA’s storage dashboard, inventories remain robust nationwide, with capacity utilization ranging from 75 percent in the South Central Salt region to highs of 92 percent in both the South Central Non-Salt and Mountain regions.

What to Watch:

• Prices: Henry Hub futures prices are exhibiting increased volatility ahead of the official start of the winter heating season. To what extent do current market fundamentals support continued price movement heading into winter?
• LNG Feedgas: Will U.S. feedgas deliveries set additional records during the upcoming winter?
• Demand: Natural gas demand is up year-over-year, driven by residential and commercial sector demand. With colder weather ahead, is a new seasonal demand record within reach?  

For questions please contact Juan Alvarado | jalvarado@aga.org, Liz Pardue | lpardue@aga.org, or
Lauren Scott | lscott@aga.org

To be added to the distribution list for this report, please notify Lucy Castaneda-Land | lcastaneda-land@aga.org

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Copyright © 2025 American Gas Association. All rights reserved.Natural Gas Market Indicators – June 6, 2025