US natgas prices climb 2% on coming heat wave, ahead of storage report

OSAKA GAS

24/07/2025 14:21

Adds latest prices

Near-normal storage build expected last week

Gas stockpiles at 6% above normal and growing

Gas output on track for monthly record high in July

Hottest days of summer coming early next week

By Scott DiSavino

July 24 (Reuters) - U.S. natural gas futures climbed about 2% on Thursday on expectations the hottest weather in three years - expected early next week - will cause the amount of gas power generators burn to soar to keep air conditioners humming.

Front-month gas futures for August delivery NGc1 on the New York Mercantile Exchange rose 5.8 cents, or 1.9%, to $3.135 per million British thermal units. On Wednesday, the contract closed at its lowest price since April 25, putting it in technically oversold territory for the first time since mid-May.

The increase occurred before a federal storage report on Thursday that is expected to show energy firms added a near-normal 33 billion cubic feet (bcf) of gas into storage during the week ended July 18.

That compares with an increase of 20 bcf during the same week last year and an average of 30 bcf over the 2020-2024 period. EIA/GASNGAS/POLL

If correct, that build would leave gas stockpiles about 6% above the five-year normal for this time of year.

Looking ahead, the premium of futures for September over August rose to a record high, a sign the market was giving up on hot summer weather in August that could cause gas prices to soar next month.

The U.S. National Hurricane Center (NHC) said a tropical system in the Gulf of Mexico had a 10% chance of strengthening into a tropical cyclone over the next week.

Even though Gulf storms can boost prices by knocking gas production out of service, analysts have noted that storms are more likely to cut demand and prices by shutting LNG export plants and knocking out power to millions of homes and businesses, which reduces the amount of gas that electric generators need to burn.

That's because only about 2% of all U.S. gas comes from the federal offshore Gulf of Mexico.

SUPPLY AND DEMAND

LSEG said average gas output in the Lower 48 U.S. states has risen to 107.3 billion cubic feet per day so far in July, up from a monthly record high of 106.4 bcfd in June.

On a daily basis, however, output was on track to drop to a preliminary two-week low of 106.2 bcfd on Thursday since hitting a daily record high of 108.5 bcfd on July 18. Analysts have noted that preliminary data is often revised later in the day.

Meteorologists forecast the weather in the Lower 48 would remain mostly hotter than normal through at least August 8. The hottest days of the summer are expected early next week.

Temperatures across the country will average around 82.4 degrees Fahrenheit (28.0 degrees Celsius) on July 28 and 82.8 F on July 29. If correct, that will exceed the summer's current hottest daily average of 80.3 F on June 24 but would remain just shy of the daily average record high of 83.0 F on July 20, 2022, according to data from financial firm LSEG going back to 2018.

LSEG forecast average gas demand in the Lower 48 states, including exports, will rise from 105.9 bcfd this week to 110.1 bcfd next week. Those forecasts were similar to LSEG's outlook on Tuesday.

The average amount of gas flowing to the eight big U.S. LNG export plants has risen to 15.7 bcfd so far in July, as liquefaction units at some of the facilities slowly exited maintenance reductions and unexpected outages. That was up from 14.3 bcfd in June and 15.0 bcfd in May but remained below the monthly record high of 16.0 bcfd in April.

Week ended Jul 18 Forecast
Week ended Jul 11 Actual
Year ago Jul 18
Five-year average
Jul 18
U.S. weekly natgas storage change (bcf):
+33
+46
+20
+30
U.S. total natgas in storage (bcf):
3,085
3,052
3,228
2,904
U.S. total storage versus 5-year average
+6.2%
+6.2%
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
3.08
3.08
2.21
2.41
3.52
Title Transfer Facility (TTF) TRNLTTFMc1
11.27
11.50
10.32
10.95
15.47
Japan Korea Marker (JKM) JKMc1
11.93
12.07
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
3
3
3
2
3
U.S. GFS CDDs
232
236
227
212
201
U.S. GFS TDDs
235
239
230
214
204
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
107.7
107.5
103.3
97.8
U.S. Imports from Canada
8.2
8.1
7.9
N/A
7.8
U.S. LNG Imports
0.0
0.0
0.0
0.0
0.1
Total U.S. Supply
116.0
115.9
115.4
N/A
105.7
U.S. Demand (bcfd)
U.S. Exports to Canada
2.0
2.1
2.1
N/A
2.3
U.S. Exports to Mexico
7.0
6.8
6.9
N/A
6.4
U.S. LNG Export Feedgas
15.4
15.1
15.3
12.0
10.0
U.S. Commercial
4.4
4.4
4.4
4.4
4.7
U.S. Residential
3.6
3.6
3.6
3.6
3.5
U.S. Power Plant
47.9
44.0
47.9
48.2
48.1
U.S. Industrial
22.2
22.3
22.3
21.8
21.7
U.S. Plant Fuel
5.3
5.3
5.3
5.3
5.4
U.S. Pipe Distribution
2.3
2.2
2.3
2.3
3.3
U.S. Vehicle Fuel
0.1
0.1
0.1
0.1
0.2
Total U.S. Consumption
85.8
81.9
85.9
85.7
86.9
Total U.S. Demand
110.2
105.9
110.1
N/A
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
76
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 Jul 25
Week ended Jul 18
2024
2023
2022
Wind
10
7
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
40
44
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
3.08
3.16
Transco Z6 New York NG-CG-NY-SNL
2.95
2.80
PG&E Citygate NG-CG-PGE-SNL
3.33
3.42
Eastern Gas (old Dominion South) NG-PCN-APP-SNL
2.67
2.56
Chicago Citygate NG-CG-CH-SNL
2.81
2.89
Algonquin Citygate NG-CG-BS-SNL
5.15
3.10
SoCal Citygate NG-SCL-CGT-SNL
3.25
3.45
Waha Hub NG-WAH-WTX-SNL
1.46
1.43
AECO NG-ASH-ALB-SNL
0.26
0.34
ICE U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub
Current Day
Prior Day
New England E-NEPLMHP-IDX
86.89
53.17
PJM West E-PJWHDAP-IDX
92.49
58.26
Mid C W-MIDCP-IDX
40.80
49.69
Palo Verde W-PVP-IDX
37.43
40.96
SP-15 W-SP15-IDX
26.13
29.73


(Reporting by Scott DiSavino; Editing by Paul Simao)

((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net/))