The rig count, holding near a two-year high at 121, reinforces the resilience of U.S. gas supply despite recent price weakness. This robust production environment is outpacing domestic consumption, which continues to lag; Friday’s U.S. gas demand was reported at just 69.7 Bcf/d, down 6% from a year ago.
Are Storage Surpluses Limiting Any Bullish Breakout?
Inventory levels remain well above average. The EIA reported an 80 Bcf injection for the week ending October 10, pushing total stocks to 3,721 Bcf — 154 Bcf above the five-year average. While the build slightly missed expectations, it was enough to reinforce the perception of comfortable supply ahead of winter.
Regional builds were broad-based, including a 30 Bcf addition in the Midwest and 20 Bcf in the South Central, with the latter now sitting more than 5% above historical norms.
Does LNG Demand Offer Relief?
LNG exports have edged higher, with flows to terminals reaching 16.2 Bcf/d, up 2.3% week-over-week. However, the global backdrop isn’t offering enough support.
European gas storage sits at 83%, below the five-year average but still ample. Despite record export flows, domestic oversupply and muted weather-related demand are keeping the market firmly on the defensive.
