BAKU, Azerbaijan, September 12. The U.S. Energy Information Administration (EIA) has released its latest outlook, forecasting that U.S. natural gas inventories will end the injection season (April–October) with 5% more gas in storage than the five-year average.
This comes despite lower-than-average storage injections for the remainder of the season. The surplus is expected to narrow from 11% at the end of August to 5% by the end of October, reflecting a trend that could support rising natural gas prices in the months ahead.
The EIA’s forecast suggests that while storage levels remain healthy, the shrinking surplus compared to the five-year average indicates tightening supply, which is likely to lead to upward pressure on natural gas prices as the market enters the winter heating season.
"Any deviations from our forecast in production or consumption could further influence prices," the EIA report stated. For example, if U.S. natural gas production falls short of expectations, or if domestic consumption increases more than anticipated, inventories could end the injection season closer to the five-year average, potentially driving prices higher than currently projected.
However, the EIA also cautioned that the upcoming peak hurricane season poses risks to its forecast. A major hurricane impacting the Gulf Coast, where many liquefied natural gas (LNG) export terminals are located, could disrupt exports. If such disruptions were to occur, more natural gas would remain in U.S. inventories than expected, which could ease supply concerns and result in lower-than-forecast prices.
The U.S. natural gas market remains in a delicate balance as it approaches winter, with several factors, including production trends, consumption shifts, and weather events, all playing a role in determining future price movements. As of now, the EIA’s outlook suggests prices will rise as the surplus narrows, but significant uncertainties remain, especially as the Gulf Coast braces for potential storms during hurricane season.
