October Pricing Analysis - North American Natural Gas

Summary

October was a regional month rather than a national one. Henry Hub next-day physical averaged $2.96/MMBtu, essentially unchanged from September, but that stability masked a late-month selloff: weekly averages fell 11.5% in W5, and HH closed October at its monthly low. The regional hubs weakened relative to the benchmark throughout, which places the pressure in local supply-demand balances rather than in a national repricing. Texas was the clearest example: Houston Ship Channel and Katy discounts widened to around $0.70/MMBtu and held there, pointing to a shift in regional pricing rather than a temporary spike and making location-specific exposure a larger share of price risk than Henry Hub alone suggests. The Northeast moved the other way, with discounts narrowing through the second half, so October's weakness was neither uniform nor market-wide. The read into withdrawal season is whether the late HH decline proves temporary or carries the regional softness into the benchmark, and whether the wider Texas discount becomes the new reference level.

Price trends

Henry Hub ended flat MoM at $2.96/MMBtu after the month's gains reversed into a close at the monthly low

• HH next-day physical opened at $3.02/MMBtu (Oct 1) and closed at $2.38/MMBtu (Oct 30). The average of $2.96/MMBtu compares with $2.95/MMBtu in September (up 0.3% MoM) and $3.20/MMBtu in October 2025 (down 7.2% YoY).
• The month had two phases. Weekly averages rose from $2.97/MMBtu (W1) to $3.13/MMBtu (W3), with the high of $3.29/MMBtu on Oct 15. They then fell 3.5% WoW in W4 and 11.5% WoW in W5, to $2.68/MMBtu.
• The intra-month range of $0.91/MMBtu was 1.7x September's $0.53/MMBtu, so a flat average concealed a wider month.
• October 2025 closed at its monthly high of $3.57/MMBtu, while October 2026 closed at its low, $1.19/MMBtu beneath it.
• All three of the largest single-day declines came on Friday prints: Oct 9 (-$0.46/MMBtu from $3.22/MMBtu), Oct 23 (-$0.32/MMBtu) and Oct 30 (-$0.30/MMBtu).

Oct 12 (Columbus Day) carries the Oct 9 assessment at all hubs; averages include it.

Cross-regional dynamics

Every hub cheapened against HH; the Texas discount widened and held while the Northeast discount narrowed after W2

• All six hubs averaged wider discounts to HH than in September, ranging from -$0.19/MMBtu (Chicago) to -$0.38/MMBtu (Algonquin). With HH flat MoM, the weakness came from the hubs, not the benchmark.
• HSC-HH widened from -$0.35/MMBtu (Sep avg) to -$0.61/MMBtu (Oct avg), and Katy-HH from -$0.35 to -$0.58/MMBtu. Both stepped wider in W3 and held between -$0.65 and -$0.73/MMBtu through W5, so the move was a reset to a new level rather than a spike.
• The sustained widening in Texas differentials suggests that regional supply-demand conditions became increasingly disconnected from the Henry Hub benchmark, increasing the importance of location-specific price exposure for producers, consumers and marketers even in a month when HH itself was flat.
• Algonquin-HH averaged -$1.49/MMBtu, against -$1.11/MMBtu in September, and narrowed from -$2.00/MMBtu in W2 to -$0.92/MMBtu in W5. TZ6 NY-HH followed the same path, from -$2.05 to -$1.16/MMBtu. The Northeast and Texas finished the month moving in opposite directions.
• Waha-HH widened to -$1.33/MMBtu from -$1.13/MMBtu, but its weekly averages stayed between -$1.28 and -$1.39/MMBtu. The step came at the turn of the month, and the Permian discount was stable within October.
• Chicago-HH widened through W4 to -$0.59/MMBtu, then narrowed back to -$0.42/MMBtu in W5.

Price volatility

Texas hub CV more than tripled to above 10% while Northeast ranges compressed

CV measures daily dispersion relative to the monthly average. Intra-month range is used alongside it for the Northeast hubs and Waha, where low averages distort CV; Waha is excluded from the table because its May and June averages were negative or near zero.

• HSC CV rose from 2.9% to 10.5% and Katy's from 2.9% to 10.4%, the highest readings for both in the May to October window. HSC's intra-month range rose from $0.30 to $0.99/MMBtu, Katy's from $0.32 to $0.97/MMBtu and Chicago's from $0.26 to $0.85/MMBtu.
• The expansion came from a directional move rather than daily noise. HSC, Katy, Chicago and HH all set their monthly lows on Oct 30, so Gulf and Midwest hubs experienced roughly three times September's intra-month price range.
• Northeast ranges narrowed, from $1.60 to $1.23/MMBtu at Algonquin and from $1.48 to $1.16/MMBtu at TZ6 NY. Range is the better measure for these hubs, because their CV swings with low averages.
• Waha's range roughly halved, from $1.04 to $0.58/MMBtu.

Something to watch

• HH's break below its October range:
  • Observation: HH closed at $2.38/MMBtu on Oct 30, $0.33/MMBtu below the $2.71/MMBtu floor it held through Oct 28 and $0.30/MMBtu below its W5 average of $2.68/MMBtu. The month's three largest declines all landed on Friday prints.
  • Why it matters: the close broke a range that had contained HH for four weeks. If early-November prints settle back above $2.71/MMBtu, the break was confined to the final print and the October range is intact. If HH holds below $2.68/MMBtu, the regional weakness has reached the benchmark at the start of withdrawal season, and the move becomes national.
  • What to monitor: daily HH Fixed Price Next Day prints against $2.71 and $2.68/MMBtu; the first withdrawal-season EIA Weekly Natural Gas Storage Report (Thursday 10:30 ET).
• Texas discount as a level shift or a dislocation:
  • Observation: HSC-HH was -$0.74/MMBtu and Katy-HH -$0.69/MMBtu on Oct 30. Both weekly averages have held between -$0.65 and -$0.73/MMBtu since W4, roughly double September's -$0.35/MMBtu.
  • Why it matters: the discount reset and then held while HH itself fell, so Texas exposure is now priced apart from the benchmark. Two levels define the read:
    • Around -$0.70/MMBtu: October's weaker basis becomes the new reference level, and Texas fixed-price exposure stays in October's higher volatility regime.
    • Inside -$0.40/MMBtu: the October deterioration begins to reverse, back toward September's -$0.35/MMBtu.
    • If HSC and Katy stop moving together, the pressure is local to one hub rather than regional.
  • What to monitor: weekly HSC-HH and Katy-HH averages and the HSC-Katy spread; Gulf Coast pipeline operator notices and LNG terminal operational notices.
• Northeast as the one region moving against October's weakness:
  • Observation: Algonquin-HH narrowed from -$2.00/MMBtu (W2) to -$0.92/MMBtu (W5), and TZ6 NY-HH from -$2.05 to -$1.16/MMBtu, while Texas discounts widened over the same weeks.
  • Why it matters: the divergence shows October's regional softness was not uniform. Further narrowing toward parity with HH would extend the only regional move against the broader weakness. Renewed widening beyond -$1.50/MMBtu would align the Northeast with the other hubs and make the softness market-wide. With intra-month ranges above $1.15/MMBtu at both hubs, weekly averages rather than single prints are the reliable read.
  • What to monitor: weekly Algonquin-HH and TZ6 NY-HH averages; Northeast pipeline maintenance notices; NWS/NOAA 6-10 and 8-14 day outlooks for the Northeast.

Note: All figures, prices and market activity referenced in this report are based on the period 1 to 30 October 2026.