Forex▼ Bearish
Natural Gas Hits 3-Month Low as Iran Talks, Weather Break Bulls
September natural gas fell 3.8% to $2.682 as Iran talks dragged European gas lower and cooler eastern U.S. forecasts broke a long-term support level.
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September natural gas hit a three-month low Tuesday, dropping 3.8% as Iran truce talks pulled European gas prices lower and domestic weather forecasts turned cooler across the central and eastern U.S.
At 15:54 GMT, September futures traded $2.682, down $0.106. The move accelerated after Monday's close under the previous low at $2.799 triggered sell stops, fueling a break into a long-term bottom at $2.676.
The Iran pause gave European gas a reason to drop, removing one of the supports that had helped U.S. futures hold earlier in the month. Europe entered late July with storage only 55% full against a five-year average near 71%, a winter deficit that had kept LNG demand relevant underneath this market. Freeport remains in maintenance and Gulf Coast feedgas demand has been running below summer highs for weeks.
"The European premium was papering over that weakness and now it's gone," one trader said. September was holding above $2.80 on the combination of domestic weather and overseas demand. When the overseas piece dropped out, the domestic balance took over.
Texas and the Plains are still running highs in the 90s and 100s with some readings hitting the 110s. ERCOT load is keeping gas-fired power demand elevated in the South. The forecast for August 1 through August 5 turned cooler across the central and eastern United States, and that was the number that broke the market Tuesday.
The Midwest, Great Lakes and Northeast are the regions that matter for national demand. They keep getting relief before the heat can build into anything sustained. Sellers watched this cycle play out every week in July. Texas gets hot, the East cools off, the bid dies. Tuesday's plunge says they are done waiting to see if August is any different.
Lower-48 dry gas production hit 113.1 Bcf per day Monday, up 3.7% from a year earlier. Demand was 81.4 Bcf per day, up 2.7% from a year ago. The gap between supply and demand is the reason September cannot hold a rally. Output is growing faster than consumption and the EIA raised its 2026 forecast to 111.2 Bcf per day earlier this month.