NYMEX gas futures test new bottom amid persistently mild temperature outlook

Near-month NYMEX Henry Hub natural gas futures foundered near an nine-month low on Aug. 13 as modelers refreshed their unremarkable near-term temperature forecasts.

The September contract closed up 2 cents to $2.82/MMBtu a day after sliding to the lowest settlement price of any prompt-month contract since mid-November 2024, according to data from both Platts, part of S&P Global Energy, and CME Group. In intraday Aug. 13 trading, the contract fell as low as $2.76/MMBtu.

Over the next two weeks, Lower 48 temperatures are expected to average about 77 degrees, putting them right on par with what is normal for the Aug. 14-27 date range, Energy latest 14-day gas demand outlook showed. At 43.7 Bct/d, forecasted gas-fired power burn over the same period is expected to trail the prior three-year average by nearly 4%.

"Cooling demand will make a step-change lower into the last third of August to bring forward the end of summer—and push back any meaningful declines in the storage surplus," Eli Rubin, senior energy analyst with EBW Analytics, said in an Aug. 13 note. "It could remain difficult for any rally in the face of a 175+ Bcf surplus to normal."

Fundamentals

As of Aug. 1, working gas in underground Lower 48 storage totaled 3.130 Tcf, a volume that is 173 Bcf above the five-year average, data from the US Energy Information Administration showed.

Platts' weekly storage survey revealed that analysts expect the EIA's Aug. 14 inventory update to report a 54 Bcf injection to gas storage for the prior week ended Aug. 8, which would push the surplus to the five-year up to 194 Bcf.

It would be a bearish print, considering that the average injection over the last five years was 33 Bcf. In 2024, the market recorded a net withdrawal of 2 Bcf in the corresponding week.

Modest gas demand and record output among US gas producers have fueled the ballooning storage surplus in 2025. At about 101.1 Bcf/d season to date, total Lower 48 gas demand has come in 1.7 Bcf/d higher than a year ago, Energy data showed.

Meanwhile, total supply of about 112.1 Bcf/d, inclusive of net imports from Canada, is 4.6 Bcf/d higher season to date relative to 2024, driven by the 5% increase year over year in US dry gas production. Production is averaging 106.4 Bcf/d season to date, Energy data showed.

In its latest Short-Term Energy Outlook published Aug. 12, the EIA predicted a decline in dry gas production materializing over the next year before output increases again in late 2026, assumptions that EBW's Rubin challenged.

"In our view, EIA projections expecting a net 0.4 Bcf/d of production increases over the next 17 months are far too low," Rubin wrote Aug. 13. "Still, we concur with the underlying thesis that supply growth will prove insufficient to match rising LNG exports to boost breakeven pricing."