US natural gas prices fall over 3% on near-record production

ReutersJul 28, 2025 8:24 PM

July 28 (Reuters) - U.S. natural gas futures fell over 3% on Monday due to near-record production, but losses were capped by forecasts for extreme heat and a shorter U.S. deadline for Russia to agree to a ceasefire in the war with Ukraine.

Front-month gas futures for August delivery NGc1 on the New York Mercantile Exchange fell 12.2 cents, or 3.9%, to settle at $2.988 per million British thermal units at 03:21 p.m. EDT, its lowest level since late April. The August contract expires on Tuesday.

LSEG said average gas output in the Lower 48 has risen to 107.4 billion cubic feet per day so far in July, up from a monthly record high of 106.4 bcfd in June.

"In the short term, these production numbers have been a negative factor. But I think we're getting close to the bottom of prices as now we see the demand expectations rising," said Phil Flynn, senior analyst for Price Futures Group.

"The market is going to face some pretty substantial amounts of air conditioning demand this week. Also, Trump's shorter deadline for Russia has raised concerns about new sanctions on Russian gas and oil."

Meteorologists forecast temperatures in the Lower 48 U.S. states will remain mostly hotter than normal this week. A heat dome is driving record-breaking temperatures across the Southeast, mid-South, and parts of the Midwest.

U.S. President Donald Trump said he was reducing the 50-day deadline he gave Russia to reach a ceasefire with Ukraine, underscoring his frustration with Russian President Vladimir Putin for prolonging fighting between the two countries. Trump has threatened new sanctions on Russia and buyers of its exports unless an agreement is reached by early September.

Oxford Economics said in a note that its baseline view assumes ample supply will keep the Henry Hub price below $3.80 per MMBtu through the decade. However, it added that "a significant share of U.S. gas is produced alongside oil, meaning a sustained drop in oil prices could reduce associated gas output and tighten the U.S. market." O/R

Venture Global said it had reached a final investment decision and successfully closed the $15.1 billion project financing for the first phase of the CP2 LNG export facility. The CP2 project, which will be the single largest export facility of the superchilled gas in the U.S., is expected to have a peak capacity of 28 million tonnes per annum of liquefied natural gas and is set to deliver its first LNG in 2027.

On the trade front, as part of the new U.S.-EU agreement, the European Union has pledged $750 billion in strategic purchases during President Trump’s term, covering oil, gas, nuclear fuel, and chips.

	Week ended Jul 25 Forecast	Week ended Jul 18 Actual	Year ago Jul 25	Five-year average Jul 25
U.S. weekly natgas storage change (bcf):	+37	+23	+18	+24
U.S. total natgas in storage (bcf):	3,112	3,075	3,246	2,928
U.S. total storage versus 5-year average	+6.3%	+5.9%


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	3.10	3.13	2.21	2.41	3.52
Title Transfer Facility (TTF) TRNLTTFMc1	11.11	11.15	10.32	10.95	15.47
Japan Korea Marker (JKM) JKMc1	11.93	11.88	12.32	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	2	2	4	2	3
U.S. GFS CDDs	232	233	207	181	173
U.S. GFS TDDs	234	235	211	183	176

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	107.5	108.1	107.5		97.8
U.S. Imports from Canada	8.2	7.9	7.8		7.8
U.S. LNG Imports	0.0	0.0	0.0		0.1
Total U.S. Supply	116.0	116.1	115.3		105.7

U.S. Demand (bcfd)
U.S. Exports to Canada	2.1	2.0	1.9		2.3
U.S. Exports to Mexico	6.8	6.7	6.9		6.4
U.S. LNG Export Feedgas	15.2	15.1	15.5		10.0
U.S. Commercial	4.4	4.4	4.4		4.7
U.S. Residential	3.6	3.6	3.6		3.5
U.S. Power Plant	44.2	50.6	44.5		48.1
U.S. Industrial	22.3	22.3	22.2		21.7
U.S. Plant Fuel	5.3	5.3	5.3		5.4
U.S. Pipe Distribution	2.2	2.4	2.2		3.3
U.S. Vehicle Fuel	0.1	0.1	0.1		0.2
Total U.S. Consumption	82.1	88.6	81.6		86.9
Total U.S. Demand	106.1	112.4	106.7		99.2

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	77	77	74	83	107
Jan-Jul	78	78	76	77	102
Oct-Sep	80	80	77	76	103


U.S. weekly power generation percent by fuel - EIA
	Week ended Aug 1	Week ended Jul 25	2024	2023	2022
Wind	8	10	11	10	11
Solar	7	7	5	4	3
Hydro	4	5	6	6	6
Other	1	1	1	2	2
Petroleum	0	0	0	0	0
Natural Gas	43	41	42	41	38
Coal	19	19	16	17	21
Nuclear	17	17	19	19	19

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub	Current Day	Prior Day
Henry Hub NG-W-HH-SNL	3.10	3.13
Transco Z6 New York NG-CG-NY-SNL	2.80	2.80
PG&E Citygate NG-CG-PGE-SNL	3.16	3.16
Eastern Gas (old Dominion South) NG-PCN-APP-SNL	2.49	2.54
Chicago Citygate NG-CG-CH-SNL	2.83	2.85
Algonquin Citygate NG-CG-BS-SNL	3.34	4.50
SoCal Citygate NG-SCL-CGT-SNL	3.29	3.28
Waha Hub NG-WAH-WTX-SNL	1.11	1.43
AECO NG-ASH-ALB-SNL	0.40	0.36

ICE U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub	Current Day	Prior Day
New England E-NEPLMHP-IDX	171.03	140.82
PJM West E-PJWHDAP-IDX	144.01	131.32
Mid C W-MIDCP-IDX	57.66	35.43
Palo Verde W-PVP-IDX	49.50	29.90
SP-15 W-SP15-IDX	32.96	19.07

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