US Natural Gas Futures Drop as Mild Autumn Weather Forecast Capping Heating Demand

Henry Hub Natural Gas Futures (NYMEX:NG1!) dropped 3.71% on Friday to close at 3.116 USD, touching a 1.5-week low. The decline was largely driven by forecasts predicting above-normal autumn temperatures across the eastern two-thirds of the United States through late October, which is expected to reduce near-term residential and commercial heating demand.

Supply and weather factors continue to create mixed pressures on the market. Domestic dry gas production expanded to 113.9 billion cubic feet per day, up 5.0% year over year, while stockpiles are projected to swell to 3,985 billion cubic feet by the end of October. However, downward price momentum was partially offset by tighter European gas inventories, where storage levels sit at 74% capacity compared to a seasonal average of 89%, fueling strong overseas demand for US liquefied natural gas exports.

Traders will be monitoring weather trends as the Northern Hemisphere prepares for potential Super El Niño weather patterns this fall and winter. Investors will also track weekly domestic storage injection rates, rig counts, and European import activity to gauge whether global demand can absorb strong domestic output.