Natural Gas Price Futures at $3.06: Storage Glut Pressures Market, LNG Contracts Fuel Long-Term Demand

Natural Gas Futures (NG=F) Slide After 90 Bcf Storage Build

Natural gas futures retreated 1.1% to $3.067 per MMBtu after the U.S. Energy Information Administration reported a hefty 90 Bcf injection for the week ending September 12. The build exceeded market forecasts of 80 Bcf and dwarfed last year’s 56 Bcf, reinforcing oversupply concerns as mild weather reduced both heating and cooling demand. This storage shock keeps bearish pressure in place and holds prices near a critical $3 threshold.

Technical Picture: Resistance at $3.24 Blocks Momentum

The short-term chart setup shows natural gas consolidating just below the $3.24 resistance. A break above this level would clear the 200-day EMA, opening upside toward $3.60–$4.00. However, repeated failures at resistance and the moving average 55 capping momentum signal weakness. Oscillators rolling over from overbought confirm near-term downside risk, with bearish targets set at $2.94 and $2.82.

Waha Hub Negative Prices Highlight Infrastructure Strain

In West Texas, the Waha Hub once again plunged into negative pricing, the eighth time in 2025. Maintenance on Kinder Morgan’s El Paso pipeline trapped gas in the Permian Basin, pushing spot quotes below zero even as futures hold near $3.067. Waha’s 2025 average at $1.63 compares with just $0.77 in 2024 and a five-year average of $2.91. These sharp regional divergences underline the fragility of U.S. pipeline capacity and its influence on cash markets.

Global LNG Contracts Drive Long-Term Demand Outlook

Long-term contracts continue to reshape the U.S. role in LNG. Shell signed a 15-year deal to supply Italy’s Edison with 0.7 mtpa starting 2028, NextDecade secured 1 mtpa over 20 years with ConocoPhillips tied to its Rio Grande LNG Train 5, and EQT added a 1 mtpa 20-year purchase with Commonwealth LNG. These agreements, all Henry Hub–linked, anchor U.S. natural gas as a global benchmark and secure export demand into the 2040s.

EQT Strengthens Market Position Through LNG Portfolio

EQT’s aggressive expansion into LNG exports has positioned it as one of the most leveraged names to global demand. The stock is up 26% YTD through June 2025, significantly outperforming the S&P 500. Analysts highlight its $250 million free cash flow power supply deal by 2029 and synergies from its Equitrans Midstream reintegration, which should drive breakevens below $2.00/Mcf by 2028. With price targets from $55 (RBC) to $68 (Barclays), EQT has tangible upside from its current ~$40 range.

Fed Rate Cuts Support Natural Gas Infrastructure Buildout

The Federal Reserve’s recent 25-basis-point rate cut lowers financing costs for LNG terminals, pipelines, and gas-fired generation. Developers like NextDecade and EQT benefit directly, as lower borrowing costs accelerate final investment decisions. Monetary easing not only supports U.S. infrastructure expansion but also amplifies the long-term demand case for natural gas as a transition fuel.

Weather Patterns and Geopolitical Risks Add Volatility

Geopolitical events continue to shape energy sentiment. New U.K. sanctions on Russian oil and drone strikes in Ukraine lifted crude, indirectly tightening the cross-commodity energy complex. In the Atlantic, Tropical Storm Gabrielle could strengthen into a hurricane, although its current path avoids the U.S. Gulf Coast. Storms remain a double-edged sword: they can shut in Gulf output yet simultaneously curtail LNG exports, producing unpredictable price swings.

Speculative Positioning Points to More Downside

Commitment of Traders data reveals heavy speculative short bets on the Houston Ship Channel contracts, with traders expecting prices to weaken relative to Henry Hub. Basis curves show expectations of minus $0.36/MMBtu by late 2025, moderating to minus $0.23 by 2027. Such aggressive positioning underscores bearish near-term sentiment, though it also raises the risk of a sharp squeeze if weather or LNG demand surprises to the upside.

Verdict: NG=F Strategy Call

At $3.067, natural gas remains pressured by storage surpluses and soft seasonal demand. Technicals lean bearish toward $2.94 and $2.82 in the short term. Yet, LNG contracts, Fed policy easing, and rising data center demand provide medium-term tailwinds. The strategy remains Buy on dips, accumulating positions between $2.80 and $3.00 in anticipation of a winter rally toward $3.60–$4.00 as heating demand aligns with record LNG exports.

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