U.S. Natural Gas Futures Up on Record LNG Export Demand, and Low Storage Numbers

The U.S. natural gas market is experiencing a bullish surge, with futures prices climbing amid unprecedented liquefied natural gas (LNG) export volumes and storage injections that have fallen short of expectations, signaling tighter supplies heading into winter. As global demand intensifies—particularly from Europe grappling with delayed inventory refills—domestic producers are ramping up activity, pointing to sustained upward pressure on prices and drilling.

Record LNG Exports Fuel Market Optimism

U.S. LNG exports shattered records in recent months, reaching 10.1 million metric tons (MT) in October 2025, surpassing the previous high of 9.4 MT in September and 9.3 MT in August.

This boom is largely driven by strong international pull, with flows averaging 16.6 billion cubic feet per day (Bcf/d) in October, highlighting robust demand from Europe and Asia.

New export facilities in Louisiana and Texas have come online, bolstering capacity and enabling these highs, even as global LNG trade growth is projected at 5% for 2025.

The Energy Information Administration (EIA) forecasts an additional 5 Bcf/d in U.S. LNG export capacity for 2025 and 2026, further supporting this export-driven rally.

Europe’s challenges are amplifying this trend. As of mid-October 2025, EU natural gas storage levels stood at 83% capacity, lagging behind the refill paces seen in 2022-2024 and below five-year averages.

This delay stems from milder early weather, slower imports, and a 6.1% rise in overall natural gas demand in the first half of 2025, with electricity generation playing a key role amid renewable shortfalls.

Compounding the issue, LNG shipping rates have surged 50% due to tight tanker supply and winter demand spikes, potentially hiking European energy costs by 10-20% this season.

Projections indicate a 25% increase in Europe’s LNG imports for 2025, underscoring the continent’s reliance on U.S. supplies to bridge gaps.

U.S. Storage Levels: Builds Below Forecast Add to Bullish Sentiment

The latest EIA Weekly Natural Gas Storage Report, released on November 6, 2025, showed a net increase of 33 Bcf for the week ending October 31, bringing total working gas in storage to 3,915 Bcf.

This build was slightly below market expectations of around 34 Bcf, contributing to perceptions of low storage relative to demand pressures and fueling price gains.

For context, the prior week (ending October 24) saw a larger injection of 74 Bcf, lifting inventories to 3,882 Bcf.

While current levels provide some buffer, the slower-than-anticipated late-season builds—amid record exports—have heightened concerns over winter drawdowns, especially if heating demand spikes.

Pricing Dynamics in the U.S. Natural Gas Market

U.S. natural gas prices reflect this tightening outlook, with distinct differences between spot and futures markets. The Henry Hub spot price stood at $3.37 per million British thermal units (MMBtu) as of November 3, 2025, down slightly from $3.57 on October 31 but up significantly from earlier lows in the year.

In contrast, futures have shown more pronounced gains: the December 2025 contract traded at around $4.257/MMBtu on November 5, with the front-month price climbing to $4.30/MMBtu by November 6—a 22.92% monthly increase and 59% year-to-date rise.

This premium in futures over spot prices indicates market anticipation of sustained demand and potential supply constraints through the winter heating season.Rig Count Comparison: Gas Drilling Gains Momentum While Oil LagsDrilling activity underscores a diverging trend between oil and natural gas rigs, with gas-focused operations on the rise amid favorable prices and export demand. According to Baker Hughes data, as of October 31, 2025, the total U.S. rig count stood at 546, down 4 from the prior week.

Natural gas rigs climbed to 125, up 4 week-over-week and marking a 3.31% increase, compared to 101 a year earlier.

Oil rigs, however, fell to 414, down 6 for the week.

Over the last several months, this pattern has persisted: