The Ledger Letter Finance Studio Advisors · October 25, 2026 |
Natural Gas Sits at $3.24 While Crude Makes a Six-Month HighIs the gas price calm because supply is ample, or because October was warm? One of those two answers holds through a cold snap, and the other sets your winter bill. |
The Breakdown Crude is pricing a war. Gas is pricing a warm October. Only one of those two can last. |
| 01 | Gas looks comfortable The November contract settled at $3.24 per million BTU on October 15, up 7.6% from $3.01 on September 29. The spot average held near $3.11. |
| | 02 | The cushion is thinner than it looks Working gas reached 3,567 Bcf, and the surplus to the five-year average narrowed from 2.0% to 1.3% in one week. The injection ran 23 Bcf light. |
| | 03 | Production is at a record Dry gas output ran 4.1% above 2025 through October 16 and is on pace for a record year. Storage still lost ground. |
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| By the Numbers | Henry Hub November contract | $3.24, up 7.6% since September 29 | | Working gas in storage | 3,567 Bcf, 1.3% above the five-year average | | Salt cavern storage | 15.4% below the five-year average, the fast-cycle kind | | LNG feedgas | Up 15.7% from 2025 so far this year | | Brent crude | $116.72, a six-month high |
Gas price, storage and flow data from the American Gas Association report of October 16, drawing on EIA and Argus figures. Brent settlement as of the October 23 close. |
One word, two markets, and only one of them is shortWhat the Headlines Lead With Every energy headline this week was crude. Oil touched $115 a barrel, the highest since May, on Middle East supply concerns and attacks on commercial shipping. The administration invoked the Defense Production Act to support domestic petroleum production, refining and storage. Washington also waived certain Russia-related sanctions to ease product supply. Brent settled Friday at $116.72. None of that moved the gas price, which spent the month in a range around $3. |
A Message From Our Partner For four decades, I’ve traded oil through every boom, bust, and war. The governments of Saudi Arabia and Kuwait hired me. And right now, I’m looking at one of the biggest oil opportunities I’ve seen in 40 years, with a three-step way anyone can take advantage. |
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Why It Matters Gas and crude share a category and almost nothing else. Crude is global and moves by sea, so a shipping lane sets the price. Gas is domestic and moves by pipe, so the pipe sets the price. US dry gas production is running 4.1% above last year and is on pace for a record. Storage still gave ground. The weekly injection came in 23 Bcf below the five-year average, and the surplus narrowed to 1.3%. Demand explains it. Total demand including exports is up more than 3% this year, while domestic consumption rose only 0.4%. LNG feedgas is up 15.7%. Plaquemines Phase 1 targets October 31 for commercial operations. The extra molecule is being exported or burned for power, not stored. What It Means for Your Money Your winter bill tracks the regional price, not the national one. Appalachia is trading $2.05 under Henry Hub and the Northeast $1.21 under, which reflects local supply rather than national comfort. Salt cavern storage is the fast-cycle kind drawn down in a cold snap, and it sits 15.4% below the five-year average. A national surplus of 1.3% does not help if the deliverable gas is in the wrong place. The weather did the work so far. In the week to October 10 temperatures ran more than 39% warmer than the 30-year normal. That is the part of this setup that changes without warning. |
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Founder, The Opportunistic Trader |
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The Day Ahead The Fed meets Tuesday and Wednesday. Alphabet and Microsoft report Wednesday and Amazon follows Thursday. The weekly storage number lands Thursday morning, and NOAA still expects above-normal temperatures into late October. That means the next report or two will flatter the picture. The real test arrives in November. Heating demand and the new export capacity will draw on the same stock at the same time. Watch the regional basis rather than the Henry Hub headline, because the regional number is the one that reaches a household. Two numbers decide the next month. The first is the Appalachia discount, which tells you whether the pipes are full. The second is the weekly draw once injections stop, which tells you how fast the cushion goes. |
Crude is priced for a war that could end. Gas is priced for a winter that has not started. |
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