Key Highlights

● Henry Hub gas slipped 1.37% to US$3.0732 per MMBtu on Monday.

● EIA reported a 67 Bcf injection, below the 74 to 76 Bcf expected.

● Storage stands 1.3% above the five-year average, down from a 68 Bcf surplus.

● EQT's second-quarter sales volume was 634 Bcfe at US$2.65 per Mcfe.

Henry Hub natural gas slipped 1.37% to US$3.0732 per million British thermal units (MMBtu) on Monday 19 October, a loss of about 4.3 cents. The move came even though the weekly storage report showed the surplus shrinking, a backdrop that matters to producers such as EQT (NYSE:EQT).

The November 2026 NYMEX contract (NGX6) closed at US$3.120 on 16 October, down 12 cents. Natural gas is down 2.96% on the week and up 8.36% on the month, but 16.63% lower year to date and 9.53% below a year ago. The front month is November, so any comparison with September quotes spans a contract roll and reflects a different delivery month as well as the market's own movement.

A Smaller Build Meets Plentiful Supply

Gas is caught between a storage story that is tightening and a production story that is still heavy. Smaller-than-average injections are eating into the surplus, while output remains high by historical standards and the weather outlook is mild.

The Storage Report Beat Expectations on the Downside

The US Energy Information Administration (EIA) reported a 67 billion cubic feet (Bcf) injection for the week ending 9 October. That was below the 74 to 76 Bcf that analysts expected and below the five-year average build of about 90 Bcf.

Working gas stood at 3,567 Bcf, which is 45 Bcf, or 1.3%, above the five-year average. A week earlier the surplus was 68 Bcf. Stocks are still 143 Bcf below the same week in 2025. Prices rose sharply in the minutes after the release, but the rally did not hold.

Production Stays High, Demand Looks Soft

Lower 48 output averaged about 110.8 billion cubic feet per day (Bcf/d) in October, below the 113.3 Bcf/d records set in August and September. Hurricane-related shutdowns, force majeure events and pipeline problems account for part of the dip. The EIA's October Short-Term Energy Outlook, released on 6 October, still projects dry gas production of 112.2 Bcf/d for 2026, up from 107.6 Bcf/d in 2025.

On the demand side, forecasts for milder-than-usual weather through 29 October could limit both heating and cooling load. Liquefied natural gas (LNG) feedgas eased to roughly 17.5 Bcf/d from 17.9 Bcf/d in September. The EIA expects LNG exports to average 17.6 Bcf/d in 2026 and 18.6 Bcf/d in 2027.

What the Official Outlook Implies

The EIA forecasts a Henry Hub average of US$3.48 per MMBtu for 2026 and US$3.16 for 2027. The 2026 figure is lifted by a January average of US$7.72 after winter storm Fern. The agency expects storage to reach about 3,850 Bcf by the end of October, roughly 2% above the five-year average entering the heating season, a target that continued small injections would make harder to reach.

Why Overseas Gas Still Matters at Home

US prices are only loosely tied to the international market, but the backdrop matters for exporters. Cheniere Energy (NYSE:LNG)'s first-quarter commentary said the closure of the Strait of Hormuz was disrupting about 7 million tonnes of LNG supply a month and that Europe needed roughly 10 million tonnes more LNG than last year to reach minimum storage targets. A July UK market report showed European gas stocks about 19% below the five-year average at that point.

Producers and Exporters Sit on Opposite Sides

EQT is a large Appalachian gas producer. Its second-quarter sales volume was 634 billion cubic feet equivalent (Bcfe), with an average realised price of US$2.65 per thousand cubic feet equivalent (Mcfe), down from US$2.81 a year earlier. It has hedged part of its output through 2027.

Cheniere is a US LNG exporter. In May it raised its 2026 adjusted EBITDA guidance to US$7.25 billion to US$7.75 billion and said unsold volumes were small, so a US$1 change in market margins would move 2026 EBITDA by less than US$50 million. Its feedstock cost is linked to Henry Hub, which makes it a buyer of gas as much as a price-taker.

Natural Gas Watch: Thursday's Storage Report and the Contract Roll

The next EIA weekly storage report is due on Thursday 22 October at 10:30 Eastern Time. Further smaller-than-average injections, lower production from storms or pipeline outages, a cold early winter and higher LNG feedgas would support prices. Record-level output, milder weather and any LNG outage would weigh on them, and LNG plant maintenance could also reduce feedgas demand.

The November NYMEX contract expires at the end of October, with December becoming the front month, so quotes will roll. The EIA's next Short-Term Energy Outlook is due on 10 November, and third-quarter results from Cheniere and EQT are the next company catalysts.