Natural gas prices have been obliterated over the past week, as early November forecasts point to one of the warmest starts on record.
In my last natural gas update on October 9, I noted that Lower 48 gas production is currently too high for the upcoming winter heating demand season. And this oversupply issue will be magnified given the current weather outlook:
As of this update, net gas supplies year-over-year are higher on average by ~2 Bcf/d.
This coincides with a production reading near ~112 Bcf/d. We project production to exceed 113 Bcf/d by year-end, which would show a meaningful surplus for the 2027 injection season.
The only way to keep natural gas prices from falling further is if this winter’s heating demand is colder than normal. Yes, not even a normal winter is enough to compensate for the oversupply in 2027, which is why natural gas traders are near-record bearish.