Natural Gas Hits $2.88- A Three-Week Low
Gas futures are at a three-week low as supply increases and demand decreases while mild weather is expected.
Quick overview
- Natural gas prices have dropped to $2.88MMBtu, the lowest in three weeks, due to excess supply.
- An abundance of natural gas in storage and low demand during mild autumn months are contributing to the price decline.
- Nymex gas futures fell as output remains low, but regular supply injections have led to an oversupply issue.
- Mild temperatures are expected to persist, suggesting that natural gas prices may remain low even through winter.
After an early month high of $2.98MMBtu, natural gas is now down to $2.88, which is its lowest point in three weeks, and the blame can be laid on excess supply.
There is an abundance of natural gas in storage, leading to lower prices as the week closes off. Over the last 24 hours, gas prices have fallen 1.96% as weather reports show that mild weather is expected for the coming week.
Gas fell 16.1 cents the previous day and continues its decline as reserves are bursting with gas that no one wants right now. Winter is coming, though, and gas demand will increase then, but during these mild autumn months, gas is in abundant supply and low demand.
Demand Likely to Remain Low
Nymex gas futures fell 3.9 cents on Friday as output remained relatively low, but supply injections of gas are still happening regularly. This has led to an oversupply issue that has plagued the industry all throughout the middle of 2025. While buyers are enjoying the lower prices and the readily available natural gas, investors are paying the price with dipping values and an abundance of gas on hand.
The problem for investors is only exacerbated by the peace talks between Ukraine and Russia. With their oil fields seemingly safe for now as the two powers discuss a ceasefire and a withdrawal from each other’s territories, the pressure is off gas processing plants and oil fields to keep their reserves safe in this region.
Demand is now down to almost its lowest point for the term. Early in the year, it was obvious that there would be no serious gas shortages since production was at record highs in the first few months. Investors are sitting at about 6% above normal levels.
Mild temperatures are expected to continue in those parts of the world where natural gas is used most, which means demand will likely mean low as supplies continue to build. Outside of some unexpected crisis, natural gas prices should remain historically low even through the winter season.
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