US natgas prices gain over 2% on mid-July heat forecasts, more cooling demand

ReutersJul 2, 2025 6:56 PM

By Sherin Elizabeth Varghese

July 2 (Reuters) - U.S. natural gas futures rose over 2% on Wednesday, snapping two days of declines, as hotter mid-July forecasts are expected to lift air-conditioning demand, prompting power generators to burn more gas.

Front-month gas futures for August delivery NGc1 on the New York Mercantile Exchange (NYMEX) settled 7.3 cents, or 2.1%, higher at $3.49 per million British thermal units (mmBtu).

"We're starting to see some heat coming onto the maps for the middle of July, and that's bringing some support back into the natural gas markets," said Gary Cunningham, director of market research at Tradition Energy.

"We're also seeing all of the LNG terminals come out of maintenance, and that just creates fundamental support from a base perspective."

Traders will watch how contracts for winter months, particularly January, respond after the U.S. Energy Information Administration's weekly storage report due on Thursday, Cunningham said.

A smaller-than-expected injection in the low 40s could push the January futures contract toward the $5 level, with winter demand posing the biggest upside risk, he added.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states has eased to 106.2 billion cubic feet per day so far in July, slightly down from 106.4 bcfd in June, when spring pipeline maintenance had temporarily curbed production.

LSEG estimated 206 total degree days over the next two weeks, compared with 182 estimated on Tuesday. It also forecast average gas demand in the Lower 48, including exports, increased to 106.1 billion cubic feet per day for the current week from 103.7 bcfd in the prior week.

Normal for this time of year is 172 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, Russia's exports of liquefied natural gas in the first half of the year declined by 4.4% from a year earlier to 15.2 million metric tons, LSEG preliminary data showed on Wednesday, amid international sanctions over Ukraine.

In particular, the U.S. has imposed sanctions on companies and vessels tied to Russia's new Arctic LNG 2 project because of the conflict in Ukraine, effectively freezing it due to difficulties for Moscow in securing buyers.

President Donald Trump has urged the European Union to buy more U.S. LNG and pledged to boost supply.

"The summer has just started and there still are quite a bit of uncertainties about the summer heat and tropical storm development," said Zhen Zhu, managing consultant at C.H. Guernsey and Company in Oklahoma City.

Hurricanes are a double-edged sword for gas markets. They can drive prices up by cutting offshore production, even if just 2% comes from federal Gulf waters, but just as easily drag them down by knocking out LNG export terminals or slashing demand during widespread power outages. Some storms hit both sides of the equation.

"Any Gulf of Mexico tropical activity would have to thread a needle to avoid LNG facilities that are located roughly every 200 miles between Corpus and Plaquemines," BofA Global Research said in a note.

"Tropical disruptions to LNG exports would likely be bearish for domestic U.S. natural gas markets but bullish for global gas markets."

Dutch and British wholesale gas prices rose on Wednesday morning, rebounding from falls earlier in the week. 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	3.41	2.81	2.41	3.52
Title Transfer Facility (TTF) TRNLTTFMc1	10.93	10.87	10.87	10.95	15.47
Japan Korea Marker (JKM) JKMc1	13.11	13.13	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	202	178	216	180	168
U.S. GFS TDDs	206	182	217	183	172

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	106.9	107.2	107.0	103.0	96.8
U.S. Imports from Canada	7.9	8.2	7.8	N/A	7.3
U.S. LNG Imports	0.0	0.0	0.0	0.0	0.0
Total U.S. Supply	114.9	115.4	114.7	N/A	104.1

U.S. Demand (bcfd)
U.S. Exports to Canada	1.8	1.9	2.0	N/A	2.3
U.S. Exports to Mexico	5.9	6.3	6.5	N/A	6.3
U.S. LNG Exports	14.2	15.2	15.6	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	44.9	44.6	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	81.9	82.7	82.3	81.4	76.8
Total U.S. Demand	103.7	106.1	106.4	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	79	77	76	103


U.S. weekly power generation percent by fuel - EIA
	Week ended July 4	Week ended Jun 27	2024	2023	2022
Wind	6	10	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	3.14	3.26
Transco Z6 New York NG-CG-NY-SNL	2.82	2.93
PG&E Citygate NG-CG-PGE-SNL	3.57	3.72
Eastern Gas (old Dominion South) NG-PCN-APP-SNL	2.55	2.71
Chicago Citygate NG-CG-CH-SNL	2.85	2.93
Algonquin Citygate NG-CG-BS-SNL	3.04	3.38
SoCal Citygate NG-SCL-CGT-SNL	3.91	4.25
Waha Hub NG-WAH-WTX-SNL	2.06	2.20
AECO NG-ASH-ALB-SNL	1.01	0.02

ICE U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub	Current Day	Prior Day
New England E-NEPLMHP-IDX	56.63	66.08
PJM West E-PJWHDAP-IDX	57.57	55.06
Mid C W-MIDCP-IDX	39.76	70.70
Palo Verde W-PVP-IDX	33.18	58.23
SP-15 W-SP15-IDX	19.29	40.26

Disclaimer: The information provided on this website is for educational and informational purposes only and should not be considered financial or investment advice.

Tradingkey