US natgas prices ease over 4% amid strong production, soft demand

ReutersJul 1, 2025 2:37 PM

By Sherin Elizabeth Varghese

July 1 (Reuters) - U.S. natural gas futures fell more than 4% on Tuesday, weighed down by expectations of rising production and milder weather that are expected to support above-average storage injections and curb demand in the coming weeks.

The front-month gas futures for August delivery NGc1 on the New York Mercantile Exchange (NYMEX) were down 15.4 cents, or 4.5% to $3.30 per million British thermal units (mmBtu) by 10:20 a.m. ET (1420 GMT).

"The expectation that U.S. natural gas production is going to remain strong has been keeping a lid on the market and ... some of the global risk premium has come off as well," said Phil Flynn, an analyst at Price Futures Group.

Trump earlier last week announced a ceasefire between U.S. ally Israel and its regional rival Iran to halt a war that began on June 13 when Israel attacked Iran. The Israel-Iran conflict had raised alarms in a region already on edge since the start of Israel's war in Gaza in October 2023.

"We think the market has overshot to the downside and is likely to turn around shortly, but in the short term, liquidation is picking up as traders anticipate moderating weather and continued strong production," Flynn added.

Flynn also noted that recent injections and supply levels have come in higher than expected, putting further downward pressure on prices. EIA/GAS NGAS/POLL

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 105.9 billion cubic feet per day in June, up from 105.2 bcfd in May, but still below the monthly record high of 106.3 bcfd in March due primarily to normal spring pipeline maintenance earlier in the month.

LSEG estimated 182 total degree days (TDDs) over the next two weeks, compared with 199 estimated on Monday. It also forecast average gas demand in the Lower 48, including exports, dipping slightly to 105.4 billion cubic feet per day (bcfd) next week from 105.6 bcfd in the current week.

The normal for this time of year is 171 TDDs. Total degree days measure the number of degrees a day's average temperature is above or below 65 degrees Fahrenheit (18 degrees Celsius) to estimate demand to cool or heat homes and businesses.

The average amount of gas flowing to the eight big U.S. LNG export plants fell to 14.4 bcfd in June, down from 15.0 bcfd in May and a monthly record high of 16.0 bcfd in April.

Meanwhile, Canada's first-ever LNG export cargo has been shipped from the country's Pacific Coast en route to Asia, a spokesperson for the Shell-led LNG Canada said on Monday.

LNG Canada is the first major liquefied natural gas facility in North America with direct access to the Pacific, and its launch comes at a time when rising trade tensions with the United States have intensified Canada's push to diversify its export markets.

Dutch and British wholesale gas prices traded in a narrow range early on Tuesday as higher temperatures across Europe limited use for heating, and the impact of cooling demand and low wind generation was mostly confined to the power market. NG/EU

	Week ended Jun 27 Forecast	Week ended Jun 20 Actual	Year ago Jun 27	Five-year average Jun 27
U.S. weekly natgas storage change (bcf):	+51	+96	+35	+61
U.S. total natgas in storage (bcf):	2,949	2,898	3,129	2,780
U.S. total storage versus 5-year average	+6.1%	+6.6%


Global Gas Benchmark Futures ($ per mmBtu)	Current Day	Prior Day	This Month Last Year	Prior Year Average 2024	Five-Year Average (2019-2023)
Henry Hub NGc1	3.41	3.58	2.81	2.41	3.52
Title Transfer Facility (TTF) TRNLTTFMc1	10.87	10.53	10.87	10.95	15.47
Japan Korea Marker (JKM) JKMc1	13.13	13.20	12.30	11.89	15.23


LSEG Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days
Two-Week Total Forecast	Current Day	Prior Day	Prior Year	10-Year Norm	30-Year Norm
U.S. GFS HDDs	4	4	1	3	4
U.S. GFS CDDs	178	195	211	179	167
U.S. GFS TDDs	182	199	212	182	171

LSEG U.S. Weekly GFS Supply and Demand Forecasts
	Prior Week	Current Week	Next Week	This Week Last Year	Five-Year (2020-2024)Average For Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production	106.4	106.9	106.5	103.0	96.8
U.S. Imports from Canada	7.9	8.1	7.6	N/A	7.3
U.S. LNG Imports	0.0	0.0	0.0	0.0	0.0
Total U.S. Supply	114.3	115.0	114.1	N/A	104.1

U.S. Demand (bcfd)
U.S. Exports to Canada	1.8	1.8	1.8	N/A	2.3
U.S. Exports to Mexico	5.9	6.9	6.6	N/A	6.3
U.S. LNG Exports	14.2	15.2	15.5	12.7	9.1
U.S. Commercial	4.4	4.4	4.3	4.4	4.8
U.S. Residential	3.8	3.6	3.6	3.7	4.3
U.S. Power Plant	43.7	43.9	43.8	44.2	38.0
U.S. Industrial	22.3	22.2	22.2	21.7	21.5
U.S. Plant Fuel	5.3	5.3	5.3	5.2	5.2
U.S. Pipe Distribution	2.2	2.2	2.2	2.1	2.8
U.S. Vehicle Fuel	0.1	0.1	0.1	0.1	0.2
Total U.S. Consumption	81.8	81.7	81.4	81.4	76.8
Total U.S. Demand	103.7	105.6	105.4	N/A	88.2

N/A is Not Available

U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam (Fiscal year ending Sep 30)	2025 Current Day % of Normal Forecast	2025 Prior Day % of Normal Forecast	2024 % of Normal Actual	2023 % of Normal Actual	2022 % of Normal Actual
Apr-Sep	76	76	74	83	107
Jan-Jul	78	78	76	77	102
Oct-Sep	79	80	77	76	103


U.S. weekly power generation percent by fuel - EIA
	Week ended July 4	Week ended Jun 27	2024	2023	2022
Wind	7	9	11	10	11
Solar	7	7	5	4	3
Hydro	5	5	6	6	6
Other	1	1	1	2	2
Petroleum	0	0	0	0	0
Natural Gas	44	42	42	41	38
Coal	19	19	16	17	21
Nuclear	17	16	19	19	19

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub	Current Day	Prior Day
Henry Hub NG-W-HH-SNL	3.26	3.23
Transco Z6 New York NG-CG-NY-SNL	2.93	2.43
PG&E Citygate NG-CG-PGE-SNL	3.72	3.03
Eastern Gas (old Dominion South) NG-PCN-APP-SNL	2.71	2.46
Chicago Citygate NG-CG-CH-SNL	2.93	2.89
Algonquin Citygate NG-CG-BS-SNL	3.38	2.70
SoCal Citygate NG-SCL-CGT-SNL	4.25	3.67
Waha Hub NG-WAH-WTX-SNL	2.20	1.42
AECO NG-ASH-ALB-SNL	0.02	0.90

ICE U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub	Current Day	Prior Day
New England E-NEPLMHP-IDX	66.08	62.93
PJM West E-PJWHDAP-IDX	55.06	68.87
Mid C W-MIDCP-IDX	70.70	70.19
Palo Verde W-PVP-IDX	58.23	54.81
SP-15 W-SP15-IDX	40.26	35.18

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