Natural Gas Slips on EIA Data: What Should Investors Do Next?

The U.S. Energy Department’s latest storage data revealed an injection that was slightly above market expectations and well above the five-year average. The larger build, combined with softer seasonal demand and weaker LNG exports, kept natural gas futures under pressure, with prices logging a weekly decline. Still, analysts highlight that longer-term fundamentals remain constructive, with forecasts pointing to stronger withdrawals this winter, rising LNG flows, and firmer pricing into 2026.

At this time, we advise investors to focus on stocks such as Expand Energy (EXE), Coterra Energy (CTRA) and Excelerate Energy (EE).

EIA Reports a Build Larger Than Market Expectations

Stockpiles held in underground storage in the lower 48 states rose by 71 billion cubic feet (Bcf) for the week ended Sept. 5, bigger than analysts’ guidance of a 69 Bcf addition. The increase compared with the five-year (2020-2024) average net addition of 56 Bcf and last year’s growth of 36 Bcf for the reported week.

The latest build put total natural gas stocks at 3,343 Bcf, 38 Bcf (1.1%) below the 2024 level, but 188 Bcf (6%) higher than the five-year average.

The total supply of natural gas averaged 112.3 Bcf per day, down a marginal 0.1 Bcf per day on a weekly basis, mainly due to a dip in dry production.

Meanwhile, daily natural gas consumption fell to 99.5 Bcf from 99.9 Bcf the week before as power demand fell, following cooler weather across the eastern and midwestern regions.

Natural Gas Prices Slip

Natural gas futures spent the week under pressure, swinging around the $3 mark before closing with a 3.5% weekly loss at $2.941/MMBtu. Prices briefly rallied early on, but faltered as the EIA reported a bearish storage build that was well above the five-year norm, pushing the surplus up. Comfortable weather across key consuming regions, softer shoulder-season demand, and weaker LNG exports further capped upside momentum. Although production eased slightly, the impact on prices was limited because the large inventory cushion is keeping the market well-supplied.

Final Thoughts

Despite recent price softness and the weight of above-average storage builds, the natural gas market retains strong structural support heading into the last quarter of 2025. Analysts see futures stabilizing near the $3/MMBtu mark, underpinned by resilient industrial demand, continued LNG expansion, and steady U.S. production. While mild weather and shoulder-season patterns have capped momentum in the near term, the extra supply now in storage also acts as a safety net, helping the market stay stable even if unexpected disruptions occur.

Looking further ahead, the story grows more constructive. With faster withdrawals expected this winter, inventories are projected to normalize closer to historical averages in 2026. LNG exports should rise steadily, too, with infrastructure already in place to meet global demand. For investors, the takeaway is clear: while short-term volatility remains, the longer-term trend points to firmer fundamentals. With natural gas playing a central role in both global energy markets and the transition era, the sector still offers attractive opportunities.

For now, a cautious but steady outlook seems appropriate. Investors may want to focus on companies with strong fundamentals and the flexibility to navigate short-term swings in the market.

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 325.5% year-over-year surge. The firm has a trailing four-quarter earnings surprise of roughly 84.5%, on average.

Coterra Energy: It is an independent upstream operator primarily engaged in the exploration, development and production of natural gas. Headquartered in Houston, TX, the firm owns some 186,000 net acres in the gas-producing Marcellus Shale of the Appalachian Basin. The company’s share of natural gas in its overall production is around 65%.

Coterra’s expected earnings per share growth rate for three to five years is currently 30.1%, which compares favorably with the industry's growth rate of 19.4%. Valued at around $18.6 billion, Coterra Energy — carrying a Zacks Rank of 3 — has a trailing four-quarter earnings surprise of roughly 6.3%, on average.

Excelerate Energy: Based in The Woodlands, TX, the company specializes in LNG infrastructure and services, focusing on Floating Storage Regasification Units (FSRUs) and related terminals. With operations across emerging and developed markets, Excelerate Energy represents 20% of the global FSRU fleet and 5% of global regasification capacity. Founded in 2003, the company aims to expand into LNG-to-power generation and gas distribution, delivering reliable and flexible energy solutions worldwide.

The Zacks Consensus Estimate for Excelerate Energy’s 2025 earnings per share indicates 5.5% year-over-year growth. This #3 Ranked firm has a trailing four-quarter earnings surprise of roughly 16.6%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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