Despite some recent cooler trends, the market has seen little sign of meaningful storage drawdowns. Unless temperatures shift materially colder, the current storage buffer is likely to continue weighing on price action.
Production Remains Elevated While Demand Lags
U.S. lower-48 dry gas output ended the week at 108.1 Bcf/day — up 5% year-over-year. Meanwhile, the EIA raised its 2025 production estimate to 107.14 Bcf/day, reinforcing confidence in long-term supply growth. Baker Hughes reported a rise in gas-directed rigs to 120, just four shy of a two-year high, signaling that upstream activity remains strong despite softening prices.
Domestic demand has struggled to keep pace. Lower-48 consumption was just 66.0 Bcf/day on Friday, down 6.7% from the same period last year. This imbalance between rising production and soft demand remains a central bearish factor.
Will Warmer Forecasts Delay Seasonal Demand?
The weather outlook is working against bulls. Forecasts from Atmospheric G2 expect warmer-than-normal temperatures across the eastern U.S. from October 20–24, limiting near-term heating demand. While some colder shots have moved through the Midwest and Northeast, overall gas consumption remains light-to-moderate — not enough to meaningfully tighten balances.
LNG feedgas flows held at 16.0 Bcf/day, up modestly week-over-week, but have yet to materially increase. This export stability offers limited support in the current oversupply environment.
