Too Much Gas, Too Little Winter?

Henry Hub front-month futures have slipped back below $3/MMBtu after a brief early-October rally, as mild weather forecasts and recovering production weigh on prices. Although the fall shoulder season has been better than feared—supported by strong power burn, rising LNG demand and temporary supply outages—the market still looks oversupplied into 1H27. Lower-48 dry gas production averaged ~110.3 Bcf/d in October, down ~2 Bcf/d m/m on Appalachian pipeline outages and hurricane-related shut-ins, but has since rebounded to ~111.3 Bcf/d. We forecast end-October storage of ~3.86 Tcf, 2% above the five-year average, and end-March 2027 storage of ~2.13 Tcf, 15% above normal under current weather forecasts. A mild El Niño winter could lift end-March inventories to ~2.78 Tcf, 50% above normal. Near-term price risks remain skewed to the downside;