Is it Time to Begin Accumulating Natural Gas?

I asked if it was time to put natural gas on the trading radar in a July 10, 2026, Barchart article, where I concluded with the following:

With the peak cooling season in high gear, the heating season on the horizon, and U.S. LNG demand soaring, this could be the perfect time to put natural gas on your trading radar. BOIL and KOLD are trading products that can enhance trading results as the volatile energy commodity follows a volatile path over the coming weeks and months.  

Nearby U.S. NYMEX natural gas futures were trading at $3.10 per MMBtu on July 9, 2026, and moved lower to below $2.80 on August 14, 2026. However, the prices for the upcoming peak season remain around $4 per MMBtu, and European prices remain elevated, which could set the stage for explosive price action over the coming months. 

Hurricane season can lift natural gas prices before the peak demand season

The U.S. Gulf Coast is home to U.S. natural gas infrastructure. The Gulf Coast touches five states: Texas, Louisiana, Mississippi, Alabama, and Florida. The CME NYMEX division natural gas futures contract’s official delivery point is Erath, Louisiana. Erath is not directly on the Gulf Coast; it is roughly 25 miles inland and connected to 11 separate pipeline systems.  

U.S. LNG export ports are primarily located along the Gulf and Atlantic coasts, with the leading hubs being Sabine Pass in Louisiana, Corpus Christi in Texas, and Cove Point in Maryland. 

The peak hurricane season in the U.S. occurs from mid-August through mid-October. During that period, natural gas inventories tend to increase in anticipation of peak heating demand in winter. 

Hurricanes have wreaked havoc on natural gas infrastructure along the Gulf Coast since the turn of this century. 

The quarterly chart since 1990 shows that Hurricane Katrina in 2005 pushed nearby NYMEX natural gas futures prices to a record high of $15.78 per MMBtu. Another storm in 2008 sent the price to the second-highest level in history at $13.694 per MMBtu. 

With the peak hurricane season only weeks away, storms that impact the U.S. Gulf Coast could cause supply fears, shortages, and damage to U.S. natural gas and LNG infrastructure, pushing prices suddenly and violently higher. 

Geopolitical tensions and sanctions continue to support higher natural gas prices

The world’s leading exporters of liquefied natural gas in 2025 were:

As the chart shows, the U.S. was the top LNG exporter in 2025, followed by Australia, which exports to Asia, Qatar, and Russia, which exports to Europe. 

Sanctions on Russia and ongoing hostilities in the Middle East around the Strait of Hormuz have impeded exports from Qatar and increased demand for U.S. LNG. 

Therefore, sanctions and war conditions have created supply fears about natural gas deliveries to Europe during the upcoming peak heating-demand season in winter, lifting European prices. 

The monthly chart of U.K. natural gas futures prices shows that the range in July 2026, from 101.49 to 157.56, was significantly higher than in July 2025, from 76.56 to 87.61. At over 150 on August 14, 2026, the U.K. natural gas futures price was significantly above the August 2025 high of 87.07.

The monthly chart of natural gas futures prices in the Netherlands shows that the range in July 2026, from 42.60 to 64.53, was significantly higher than in July 2025, from 32.365 to 36.32. At over 61 on August 14, 2026, the price was substantially above the August 2026 high of 35.40.

The bottom line is that sanctions and geopolitical tensions have pushed LNG and natural gas prices higher in 2026. 

The forward curve reflects rising seasonal demand, but the prices could still be too low

While nearby NYMEX U.S. natural gas futures prices for nearby delivery are below $2.80 per MMBtu, the forward curve shows that prices for peak season delivery in late 2026 and early 2027 are substantially higher. 

The forward curve shows that natural gas futures prices for December 2026 and February 2027 delivery are above $3.58 per MMBtu and prices for January 2027 delivery are over $4.00 per MMBtu.

Seasonality, the hurricane season, and geopolitical events could create a bullish environment for natural gas prices over the coming days, weeks, and months. 

Inventories are steady but below last year’s level

As of the week ending on August 7, 2026, U.S. natural gas inventories were slightly below the previous year, but above the five-year average for early August. 

At 3.153 trillion cubic feet, U.S. natural gas inventories were 0.8% below last year’s level but 6.7% above the 5-year average.

At the end of the 2025 injection season, U.S. inventories reached a high of 3.960 tcf. Over 800 bcf will need to flow into U.S. inventories to reach the level at the end of last year’s injection season, which tends to end in November when heating demand increases, and withdrawals from inventories begin. 

UNG, BOIL, and KOLD are natural gas trading tools

Seasonality, the upcoming hurricane season, geopolitical turmoil, and current inventory levels suggest that higher U.S. natural gas futures prices could be on the horizon for the rest of 2026 and into early 2026. 

The most direct route for a risk position in the volatile U.S. natural gas market is the futures and futures options trading on the CME’s NYMEX division. However, futures and options require specialized accounts, and futures and short positions in options have margin requirements, creating leverage. 

The unleveraged U.S. Natural Gas Fund ETF (UNG) tracks U.S. natural gas futures and is available in standard equity accounts. At $10.10 per share, UNG had over $466 million in assets under management. UNG trades an average of over 8.66 million shares per day and charges a 1.24% management fee. 

The Ultra Bloomberg Natural Gas 2X ETF (BOIL) and the Ultrashort Bloomberg Natural Gas -2X ETF (KOLD) magnify the price action in the NYMEX natural gas futures on the upside and downside, respectively. BOIL and KOLD are short-term trading tools that require careful attention to risk-reward dynamics because the options and swaps that create their leverage can suffer from time decay that erodes value when natural gas futures prices move contrary to expectations or remain stable. 

I believe that the odds favor higher natural gas prices over the coming peak demand season beginning in the fall. Therefore, this could be the perfect time to begin accumulating a long position in futures, call options, UNG, or BOIL, leaving room to add on declines over the coming weeks and months. When considering BOIL, the leverage requires attention to risk, making accumulation dangerous. Tight stops and reentry into risk positions using BOIL as optimizing leveraged products depend on the ability to accept small losses in the quest for oversized gains.