Key Takeaways
- U.S. natural gas futures (UNG) dropped by 3-5% on Friday, October 10, 2025, hitting a two-week low of approximately $3.15-$3.17 per MMBtu, driven by robust storage levels and forecasts for milder weather.
- The U.S. federal government shutdown, which began on October 1, 2025, has entered its tenth day, leading to the start of "substantial" federal employee layoffs as confirmed by the Trump administration's Office of Management and Budget (OMB).
- Natural gas inventories are 4.5% to 5% above the five-year average, with a recent 80 billion cubic feet (Bcf) injection for the week ending October 3, signaling a comfortable supply outlook ahead of the winter heating season.
- Roughly 900,000 federal employees are furloughed, and 700,000 are working without pay, with military personnel facing the prospect of missed paychecks by October 15 if the congressional stalemate persists.
Natural Gas Prices Retreat on High Inventories and Mild Forecasts
U.S. natural gas futures (UNG) extended their recent declines on Friday, October 10, 2025, falling by an estimated 3-5% to a two-week low, trading between $3.15 and $3.17 per million British thermal units (MMBtu). This downturn marks a more than 4% weekly drop, snapping a previous two-week rally, as market participants reacted to abundant supplies and unseasonably warm weather predictions.
The latest data from the U.S. Energy Information Administration (EIA) revealed an 80 Bcf injection into natural gas storage for the week ending October 3, 2025. This figure slightly surpassed market expectations of a 77 Bcf build and contributed to total working gas in storage reaching 3,641 Bcf. Current inventories stand comfortably above historical averages, being 0.6% higher than last year and 4.5% to 5% above the five-year average for this time of year, alleviating immediate concerns about winter supply.
Mild weather forecasts for late October and early November across key U.S. regions, particularly the Midwest and South, are further dampening demand expectations. These warmer-than-average conditions are expected to limit early heating demand, contributing to the bearish sentiment in the natural gas market. Despite a slight easing in average gas output in the Lower 48 states to 106.4 Bcf/day in October from 107.4 Bcfd in September, record production earlier in the year ensured robust storage injections. Meanwhile, U.S. liquefied natural gas (LNG) exports remain strong, averaging 16.1 Bcfd this month, near record highs, which continues to link domestic prices to global energy dynamics.
Government Shutdown Triggers Federal Layoffs Amid Political Gridlock
The U.S. federal government shutdown, now in its tenth day, has escalated with the Trump administration initiating "reductions in force" (RIFs), or layoffs, for federal employees. Russ Vought, Director of the Office of Management and Budget (OMB), confirmed the commencement of these layoffs, which an OMB spokesperson described as "substantial." This action follows earlier threats from the White House to use the shutdown as leverage for federal workforce reductions.
The shutdown began on October 1, 2025, after Congress failed to pass appropriations legislation for the 2026 fiscal year, marking the 11th such event in U.S. history and the third under President Donald Trump's tenure. The prolonged stalemate has resulted in approximately 900,000 federal workers being furloughed and another 700,000 continuing to work without pay. Federal employees received only partial paychecks on Friday, covering work performed before October 1, and there is a significant risk that military personnel will miss their upcoming paycheck on October 15 if the funding lapse continues.
Political negotiations to resolve the shutdown remain deadlocked. The Senate has repeatedly failed to advance competing spending bills from both Democratic and Republican parties, unable to garner the necessary bipartisan support. House Speaker Mike Johnson has maintained the House out of session in an effort to pressure Senate Democrats, while Senate Minority Leader Chuck Schumer has indicated confidence in the Democrats' negotiating position as the shutdown persists.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.