Stock market today: S&P 500 ends lower as Fed rate cut, outlook meet expectations
- Henry Hub prices stabilized near $3 after testing annual lows above $2.60 per MMBtu.
- Weather-driven cooling demand supports gas consumption, while rapid storage injections limit price spikes.
- Key resistance sits at $3.20, with potential upside to $3.60 and support near $2.90–$2.60.
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After hitting this year’s lows just above $2.60 per MMBtu, Henry Hub Natural Gas prices have stabilized around the $3 mark. Higher demand for cooling due to weather is supporting prices, but this is balanced by growing storage surpluses in preparation for winter. The U.S. Energy Information Administration (EIA) has slightly lowered its average price forecasts for this year and next. In the short term, weather, gas demand, and storage levels will continue to be the main drivers.
EIA Slightly Lowers Natural Gas Price Forecasts
The latest EIA report updated its natural gas price forecasts based on Henry Hub contracts, projecting $3.52 per MMBtu for this year and $4.28 per MMBtu in 2026. This is down from the previous forecast of $3.61 and $4.34, respectively. Looking at the short term, the EIA expects an average price of $3.04 per MMBtu in the third quarter, suggesting that prices could stay near current levels at least until the start of the winter season.
Weather forecasts indicate above-average temperatures across most of the US over the next several days, which is likely to increase cooling demand and, in turn, natural gas consumption. This impact is largely offset by the rapid pace of storage injections, which reached 71 billion cubic feet in the first week of September—well above the five-year average of 56 billion cubic feet and last year’s 36 billion cubic feet.
Given these figures, natural gas prices are likely to move sideways over the next few weeks, at least until the start of the heating season, when updated forecasts for weather and storage levels become available.
Will HenryHub Prices Challenge Key Resistance Levels?
For prices to remain in a consolidation phase, technical analysis suggests that supply must hold the resistance around $3.20 per MMBtu.
In the event that the indicated resistance is broken, then the way is opened for an approach to the area of at least $3.60 per MMBtu. In maintaining a sideways movement from the point of view of support levels, attention should be paid primarily to the vicinity of $2.90 and $2.60 per MMBtu, where, in addition, this year’s minima fall.
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