U.S. Natural Gas Futures Extend Weekly Losses on High Supply

The U.S. Energy Department's latest inventory report showed a higher-than-expected increase in natural gas supplies. The bearish inventory numbers, together with strong production levels, put pressure on natural gas futures, which settled with a fourth consecutive loss week over week. Longer term, however, forecasts suggest tightening balances and higher prices into 2026.

At this time, we advise investors to focus on stocks such as Expand Energy EXE, Gulfport Energy GPOR and Antero Resources AR.

EIA Reports a Build Larger Than Market Expectations

Stockpiles held in underground storage in the lower 48 states rose by 56 billion cubic feet (Bcf) for the week ended Aug. 8, bigger than analysts’ guidance of a 53 Bcf addition. The increase compared with the five-year (2020-2024) average net addition of 33 Bcf and last year’s withdrawal of 2 Bcf for the reported week.

The latest build put total natural gas stocks at 3,186 Bcf, 79 Bcf (2.4%) below the 2024 level, but 196 Bcf (6.6%) higher than the five-year average.

The total supply of natural gas averaged 112.1 Bcf per day, up 0.2 Bcf per day on a weekly basis, mainly due to higher shipments from Canada.

Meanwhile, daily natural gas consumption rose to 108.1 Bcf from 102.8 Bcf the week before as power demand strengthened.

Natural Gas Prices Fall Again

Prices reacted with volatility. The September front-month contract slipped below $2.90/MMBtu early in the week, pressured by strong storage levels and resilient supply, briefly touching levels not seen since November 2024. Yet sentiment shifted later, as forecasts hinted at stronger late-summer cooling demand and LNG flows picked up. By Friday, futures rebounded to $2.916/MMBtu. Overall, the commodity was down some 3% week over week — the fourth drop in a row. Traders remain cautious, eyeing weather models and tropical storm activity, which could both disrupt production and temporarily dampen export capacity.

Final Thoughts

On the supply side, output remains near record levels. Production in the Lower 48 states has averaged over 108 Bcf per day so far in August, up from July’s record 107.9 bcf/day, although daily volumes have recently dipped from late-July highs. LNG flows are rebounding, with shipments climbing to about 16.2 Bcf per day, matching prior records. Freeport LNG in Texas also returned close to full service after a brief disruption, further boosting export activity. On the demand front, meteorologists still project hotter-than-normal conditions through the end of August, though intensity has moderated, trimming expectations for peak cooling needs.

Looking forward, the backdrop for natural gas still leans constructive. Inventories may be above average now, but the EIA expects them to fall closer to the five-year mean as the year progresses, tightening balances into the winter heating season. The agency projects Henry Hub to average $3.60/MMBtu in the second half of 2025 and climb to $4.30 in 2026, supported by incremental LNG export growth and steady power sector demand.

For now, a measured outlook makes sense. Investors might consider names with solid fundamentals and the agility to weather short-term uncertainty

3 Stocks to Focus on

Expand Energy: Expand Energy has solidified itself as the largest natural gas producer in the United States, following the Chesapeake-Southwestern merger. With key assets in the Haynesville and Marcellus basins, Zacks Rank #3 (Hold) EXE is well-positioned to capitalize on the increasing demand for natural gas, driven by LNG exports, AI/data centers, EV expansion, and broader electrification trends.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Expand Energy’s 2025 earnings per share indicates a 370.2% year-over-year surge. The firm has a trailing four-quarter earnings surprise of roughly 84.5%, on average.

Gulfport Energy: Gulfport Energy is a natural gas-focused exploration and production company headquartered in Oklahoma City, OK. Operating primarily in the Utica Shale in Ohio and the SCOOP play in Oklahoma, Gulfport has emerged from bankruptcy with a stronger balance sheet and a free cash flow-oriented strategy. With more than 90% natural gas production, the company, with a Zacks Rank of 3, prioritizes Utica development to drive free cash flow, reduce debt and align with ESG-focused investor expectations.

The Zacks Consensus Estimate for Gulfport Energy’s 2025 earnings per share indicates a 46.7% year-over-year surge. Valued at around $2.9 billion, GPOR has a trailing four-quarter earnings surprise of roughly 7.3%, on average.

Antero Resources: It is one of the leading natural gas producers in the United States. Antero Resources has more than two decades of premium low-cost drilling inventory in the prolific Appalachian Basin, indicating a strong production outlook. AR churned out 312 billion cubic feet equivalent in the most recent quarter, of which 65% was natural gas.

The Zacks Consensus Estimate for Antero Resources’ 2025 earnings per share indicates 1,281% year-over-year growth. As far as revenues are concerned, the consensus mark for this #3 Ranked firm indicates 25.5% improvement over 2024.

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