• October NYMEX gas futures fall ~5% to around $3.14/MMBtu as expiry nears, reversing prior day's rally.
  • Storage remains adequate but below year-ago levels; market eyes weather and LNG demand.
  • Expiry-week liquidity crunch amplifies price swings, with traders rolling into November contract.

Expiry-Driven Selloff

US natural gas futures tumbled on Friday, with the prompt-month October contract at the New York Mercantile Exchange sliding roughly 5% in early trade as it approaches expiration on September 28. By mid-morning, the contract was quoted around $3.143 per MMBtu, down $0.154, or 4.67%, according to exchange data. The sharp decline follows an unusually strong rally just a day earlier, when the same contract surged 9.1% after a force-majeure notice related to an unexpected mechanical issue on TC Energy (TRP)’s Columbia Gas Transmission system in Appalachia sparked a wave of short-covering.

The about-face underscores the capricious nature of expiry-period trading, where thinning liquidity can magnify price moves. “You get these violent reversals when the roll is on and positions are being squared,” said a Houston-based gas trader, who asked not to be identified. “The market was technically overextended after Thursday’s spike, and with storage still comfortable, there was little to hold it up.”

Storage Cushion Limits Upside

The latest inventory data did little to support prices. The Energy Information Administration reported a 53-Bcf injection into working gas storage for the week ended September 18, bringing total stocks to 3,351 Bcf. That’s 146 Bcf below a year earlier but still 95 Bcf—or 2.9%—above the five-year average. The build was slightly larger than market expectations, according to Investing.com, reinforcing the view that near-term supply remains adequate even as year-on-year inventories lag.

“We’re in the shoulder season, so demand is in limbo,” said a analyst at a commodity research firm. “Cooler weather forecasts have trimmed power burn, and there’s no heating demand yet. The storage surplus over the five-year average gives the market a comfortable buffer.”

Pipeline Outage and LNG Demand in Focus

Thursday’s rally was triggered by the force-majeure notice on Columbia Gas Transmission, which briefly raised concerns about regional supply tightness. However, by Friday, traders appeared to shrug off the event, assuming it would be resolved without lasting impact. TC Energy did not immediately respond to a request for comment.

Meanwhile, the broader demand picture remains mixed. US LNG exports averaged 17.4 Bcf/d in the first half of 2026, up 23% from the same period in 2025, according to the EIA, tightening the domestic balance and linking US prices more closely to global markets. Yet record domestic production has largely kept pace, preventing a sustained spike.

Volatility to Persist

With the October contract set to expire on September 28, market participants expect continued volatility as traders roll positions into the November contract. The next major catalyst will be the EIA’s storage report on October 1, which will provide a fresh read on supply-demand balances. Weather forecasts for the transition into heating season and the resolution of the Columbia pipeline issue are also key watchpoints.

“The market is searching for direction,” said a risk manager at a Midwest utility. “Until we see a sustained shift in weather or a supply disruption, prices are likely to stay range-bound, with expiry adding an extra layer of noise.”

At 11:00 a.m. ET, the November contract was trading at $3.22/MMBtu, down 3.8% from Thursday’s close.

Update: This article was updated to include additional market commentary and the latest price data.