EIA Data Lifts Gas Futures: Where Should Investors Focus?

The U.S. Energy Department’s latest natural gas storage report showed an injection tallying market expectations and close to the five-year average. While production eased slightly, stronger power demand helped lift overall consumption. In this setting, natural gas futures moved upward, supported by stronger LNG activity and signs of tightening supply. Analysts note that with winter approaching, balances are set to improve, keeping the longer-term outlook constructive for investors.

At this time, we advise investors to focus on stocks such as The Williams Companies (WMB), Expand Energy Corporation (EXE) and Coterra Energy (CTRA).

EIA Reports a Build In Line With Market Expectations

Stockpiles held in underground storage in the lower 48 states rose by 75 billion cubic feet (Bcf) for the week ended Sept. 19, matching analysts’ guidance. The increase compared with the five-year (2020-2024) average net addition of 76 Bcf and last year’s growth of 49 Bcf for the reported week.

The latest build put total natural gas stocks at 3,508 Bcf, 22 Bcf (0.6%) above the 2024 level and 203 Bcf (6.1%) higher than the five-year average.

The total supply of natural gas averaged 111.7 Bcf per day, down a marginal 0.1 Bcf per day on a weekly basis, due to a dip in dry production partly offset by higher shipments from Canada.

Meanwhile, daily natural gas consumption rose to 101.3 Bcf from 98.6 Bcf the week before, as power demand strengthened on the back of warmer weather in the Mid-Continent and Northeast regions.

Natural Gas Prices Pick Up

Natural gas futures ended the week with sharp swings, reflecting a mix of storage data and shifting demand. November futures closed at $3.206 on the New York Mercantile Exchange on Friday, gaining roughly 10% for the week, supported by firmer LNG flows and a temporary pullback in domestic production. Still, mild early-October weather kept heating demand subdued, tempering near-term momentum. For investors, the strong weekly advance signals resilience, but market direction remains closely tied to storage builds and winter demand forecasts.

Final Thoughts

Natural gas futures showed resilience this past week, with November contracts climbing handsomely despite tepid temperatures and ample storage levels, signaling that the market remains strong even as inventories remain comfortably above the five-year average. This balance of steady supply and improving demand trends suggests that the sector is entering the final stretch of injection season on firmer footing.

Looking ahead, the outlook leans constructive. Analysts point to robust industrial demand, expanding LNG export capacity, and the potential for a colder winter as catalysts that could lift prices into year-end and beyond. While near-term fundamentals remain weather-dependent, the structural drivers — resilient production, strong exports, and global demand growth — continue to anchor natural gas as a key investment theme. For investors, the sector offers a blend of stability and upside potential as the market moves closer to the peak winter months.

For the time being, a measured yet steady approach appears reasonable. Attention may be better directed toward companies with solid fundamentals and the resilience to handle near-term market fluctuations.

3 Stocks to Focus on

The Williams Companies: With U.S. natural gas demand projected to grow significantly in the long term, The Williams Companies seems to be well-positioned to capitalize on the same owing to its impressive portfolio of large-scale value-creating projects. With its extensive network handling a third of the U.S. natural gas and significant expansion projects in the pipeline, Williams is set to benefit from favorable industry dynamics and growth prospects.

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, 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.

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%.

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

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