(WCTW) The Natural Gas Market Risks The Potential Of A Price Spike

What's happening in the natural gas market today is not normal.

Let me clarify.

The August weather setup is not normal. The weather this month is expected to be so bearish that it will be the lowest cooling demand since 2017.

Source: CommodityWxGroup

To put the power burn demand loss into perspective, from August 1 to 12, power burn demand was down ~7.3 Bcf/d y-o-y.

That's insane.

But what you will notice is that total demand remains above last year, thanks largely to the structural demand increases (LNG + Mexico). Total gas supplies are also higher year-over-year as production was impacted by low prices last year.

In aggregate, net gas supplies remain only slightly above last year (on average). As a result, the majority of the surplus we are seeing in gas storage is primarily due to lower power burn demand from the weather.

So what gives? Why are natural gas prices so low?

Source: CME

If you look at the futures curve, there's only 1 month above $4/MMBtu today (January 2026), and that's the heart of winter.

With +3 Bcf/d of gas demand coming online by year-end, I would think the market would be considerably more cautious than that.

As a result, is this one of those “obvious” moments where we invest more in natural gas names?

Yes, and I will explain why the market is being too apathetic about a price spike into 2026.