Nat-Gas Prices Rise on Hotter US Weather and Expectations of Smaller Storage

On Wednesday, October's Nymex natural gas (NGV26) closed at a higher price as hotter US weather was expected to increase nat-gas demand from electricity providers due to rising air-conditioning usage. Forecaster Vaisala reported that temperatures had been warmer across the Midwest and East during September 7-11, and grew warmer in the Midwest from September 12-16. Hotter-than-normal weather in the Northern Hemisphere this fall and winter could reduce nat-gas heating demand, posing a bearish medium-term factor.

Expectations of a smaller seasonal build in US nat-gas storage also contributed to the price rise. The consensus anticipates US nat-gas inventories to have increased by 32 bcf (billion cubic feet) for the week ended August 28, lower than the five-year average of 37 bcf. This expectation was supported by the weekly EIA report showing a 15 bcf increase in US nat-gas inventories for the week ended August 21, which was in line with expectations but below the 5-year weekly average of 33 bcf.

As of August 21, US nat-gas inventories were down 1.0% year-over-year and 5.5% above their 5-year seasonal average, indicating sufficient supply. Meanwhile, Europe's nat-gas storage was at 65% capacity, compared to the 5-year seasonal average of 82% for this time of year. Baker Hughes reported that the number of active US nat-gas drilling rigs rose by 5 to 132 rigs in the week ended August 28, near the 3-year high of 134 rigs set in February 2026.