Natural Gas Reaches 4-Week Low with Demand Falling
Nymex futures dipped this week to their lowest point in a month but Europe expects much higher gas prices next year.
Quick overview
- Nymex natural gas futures have dropped to $2.80/MMBtu, the lowest price in four weeks, primarily due to low demand.
- High supplies and expectations of mild weather are contributing to the low prices, which may persist in the coming weeks.
- Analysts predict a potential 60% increase in European gas prices in early 2026 due to expected cold weather, despite current low prices.
- In the U.S., natural gas reserves are abundant, and a warm winter is anticipated for the southern states, ensuring adequate supply.
On Wednesday, the price for Nymex natural gas futures fell to $2.80/MMBtu, which is the lowest the price has been in four weeks, and low demand is the chief contributing factor.
Natural gas analysts are blaming the low prices on remarkably high supplies, expectations of mild weather, and diminished demand. The price of gas is now down to its lowest point in a month, and it may remain low for the coming weeks.
With regular injections of new gas into reserves, there is no shortage for suppliers to worry about. As the weather remains relatively warm and mild throughout the United States, Nymex futures are at their low point. The record levels of gas production throughout the year, especially early on, has accounted for higher than expected supplies on hand.
Massive Jump in European Gas Prices Expected in 2026
Even though gas prices are significantly low at the moment, that could change in the coming months. There is a strong chance that winter will be especially cold in Europe this year, draining the supply quickly and creating a run on gas that has not been seen in a while.
In fact, analysts expect that European gas prices could rise as much as 60% early on in 2026 during the first few cold months. Even with a new LNG supplier entering the market, the expected extreme cold could be enough to offset that new supply and boost gas prices.
Dutch TTF Natural Gas Futures have been trading at around $37.75 per MWh over the past few weeks. That is expected to change in the next few months, and analysts are basing that prediction on last year’s very cold winter. It was the coldest recorded winter in Europe since Russia began attacking Ukraine.
US Gas Supplies Remain Abundant
In the United States, the winter months are not expected to become quite as severe. The entire southern portion of the United States is in for a warm and dry winter compared to previous years, although the northern half of the U.S. should have a very snowy and cold winter.
The current natural gas reserves should hold just fine through the American winter, keeping houses well supplied with heat without any significant loss to supplies. The emerging La Niña weather pattern should disrupt the cold fronts and create a relatively warm winter for much of the United States.
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