US Gas Slides to a Three-Week Low on a Bigger Storage Build as Europe Pays Up
Stockpiles rose 40 billion cubic feet in a week, beating forecasts and leaving US inventories nearly 5% above normal, the mirror image of Europe's depleted storage.
US natural gas prices slid to a three-week low on Thursday after government data showed stockpiles growing faster than expected. The Energy Information Administration reported that 40 billion cubic feet of gas went into storage in the week to 4 September, above the roughly 31 billion that analysts had forecast. Henry Hub futures fell below $2.78 per million British thermal units.
The contrast with Europe could hardly be sharper. Across the Atlantic, benchmark gas prices have climbed to their highest since late 2022, and storage sites are fuller than normal almost nowhere.
Context: plenty of gas at home
Total US working gas in storage reached 3,254 billion cubic feet, according to the EIA's weekly report. That is 148 billion cubic feet, or just under 5%, above the five-year average for the time of year, although 79 billion below the level of a year earlier. Only the South Central region, which includes Texas and the Gulf Coast states, recorded a net withdrawal, of 7 billion cubic feet, as above-average temperatures in the South kept air-conditioning demand high.
Supply is the main reason for the comfortable position. Production in the lower 48 states has averaged around 112.9 billion cubic feet a day so far in September, above August's record, supported by growth in the Permian and Haynesville regions. The EIA expects inventories to reach about 3,969 billion cubic feet by the end of October, 5% above normal as the heating season begins.
Regional surpluses are showing up in unexpected places. In New England, a market better known for price spikes in cold snaps, gas has recently traded near record discounts to Henry Hub thanks to cheap supplies from Appalachia and Canada, the EIA noted this week.
Why it matters
The gap between American and European prices is what drives the US liquefied natural gas business. Flows of feedgas to the country's major export terminals rose to around 18 billion cubic feet a day in early September, up from 17.2 billion in August, as plants in Texas returned from maintenance. With Qatari cargoes disrupted and buyers in Europe and Asia competing for supply, demand for US cargoes is strong.
There is a limit, however. Export capacity is fixed in the short term, so strong overseas demand cannot pull unlimited volumes out of the US market. That is why American prices can fall even while European prices soar: once terminals are running at capacity, extra domestic gas has nowhere to go but into storage.
For American households and power producers, that is good news heading into winter. For Europe, it means US supply can ease the squeeze but not end it.
- Injection: 40 billion cubic feet in the week to 4 September, against expectations of about 31 billion.
- Inventories: 3,254 billion cubic feet, 4.8% above the five-year average.
- Price: Henry Hub futures below $2.78, a three-week low.
- Exports: LNG feedgas around 18 billion cubic feet a day in September, up from 17.2 billion in August.
- Winter: the EIA sees end-October stocks near 3,969 billion cubic feet, 5% above normal.
Outlook
The EIA's latest outlook still forecasts Henry Hub averaging $3.43 across 2026 and $3.28 in 2027, and expects LNG exports to keep growing next year as new capacity comes online. The next weekly storage report is due on 17 September.
Weather will decide the near-term direction. A hot end to September would slow injections and lend some support to prices; an early cool spell would push stockpiles higher still. Either way, the United States enters the winter in a far stronger position than the buyers on the other side of the Atlantic who depend on its cargoes.
Image: Dual Freq via Wikimedia Commons, CC BY 2.5