Bank of America has reduced its price forecast for September-December 2025 to $3.0/mmbtu, citing persistent loose market balances despite record summer heat.

The fourth hottest June-July period in 30 years has been insufficient to tighten the natural gas market, as production growth and power sector looseness exceeded 6 Bcf/d year-over-year, outpacing the 3.3 Bcf/d increase in LNG demand. This imbalance has expanded the storage surplus from 117 Bcf at May’s end to 195 Bcf currently.

BofA analysts project end-of-summer inventories will reach approximately 3.93 Tcf, with western U.S. and Canadian regions rapidly refilling stocks. The bank warns that natural gas could get pushed back to the Midwest and Eastern U.S. this fall, while tropical activity might complicate daily injection requirements.

The bank has also lowered its 2026 price outlook to $4.0/mmbtu from previous higher forecasts, as production growth is now expected to largely offset increased LNG demand. October 2026 inventory is projected at 3.68 Tcf, only about 70 Bcf below normal levels.

Record production levels in Appalachia despite the lowest rig count since 2021, combined with Haynesville’s increasing efficiencies and “LNG ready” status, contribute to the bearish outlook, while the natural gas rig count has increased by more than 20% since Q1 2025 in response to higher prices earlier this year.
Source: Investing.com