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

OSAKA GAS

02/07/2025 15:40

By Sherin Elizabeth Varghese

July 2 (Reuters) - U.S. natural gas futures rose more than 2% on Wednesday, snapping a two-day losing streak, as hotter mid-July forecasts are expected to lift demand for air conditioning over the next two weeks, prompting power generators to burn more gas.

   Front-month gas futures for August delivery NGc1 on the New York Mercantile Exchange (NYMEX) were 7.4 cents, or 2.2%, higher at $3.49 per million British thermal units by 10:14 a.m. EDT (1414 GMT).

"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."

The main risk lies in how the winter contracts, 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 risen to 106.2 billion cubic feet per day so far in July, up from 105.9 bcfd in June, when normal spring pipeline maintenance curbed production. Output remains just below the monthly record high of 106.3 bcfd set in March.

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.

The 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.

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

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
3.26
3.26
Transco Z6 New York NG-CG-NY-SNL
2.93
2.93
PG&E Citygate NG-CG-PGE-SNL
3.72
3.72
Eastern Gas (old Dominion South) NG-PCN-APP-SNL
2.71
2.71
Chicago Citygate NG-CG-CH-SNL
2.93
2.93
Algonquin Citygate NG-CG-BS-SNL
3.38
3.38
SoCal Citygate NG-SCL-CGT-SNL
4.25
4.25
Waha Hub NG-WAH-WTX-SNL
2.20
2.20
AECO NG-ASH-ALB-SNL
0.02
0.02
ICE U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub
Current Day
Prior Day
New England E-NEPLMHP-IDX
66.08
66.08
PJM West E-PJWHDAP-IDX
55.06
55.06
Mid C W-MIDCP-IDX
70.70
70.70
Palo Verde W-PVP-IDX
58.23
58.23
SP-15 W-SP15-IDX
40.26
40.26


text_section_type="notes">
For gas data on the LSEG terminal type ENERGY in the search bar and then go to the GAS drop down and the NORTH AMERICA drop down.

For Interactive Map, type 'Interactive Map' in the box at upper left of the LSEG terminal

For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html

For next-day SNL U.S. gas prices, see: 0#SNL-NG

For next-day SNL U.S. power prices, see: 0#SNL-PWR

For U.S. natgas price and storage polls, see: NGAS/POLL

For U.S. nuclear power outages, see: NUKE/

For U.S. Northwest hydro power report, see: NWRFC

For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44

For the U.S. natural gas speed guide, see: USGAS

For the U.S. power speed guide, see: USPOWER

To determine CFTC managed money net position add (NYMEX Henry Hub options and futures combined 3023651MNET) plus (ICE Henry Hub options and futures combined 3023391MNET divided by four) plus (NYMEX Henry Hub swaps options and futures combined 303565BMNET divided by four) plus (NYMEX Henry Hub penultimate gas swaps 303565CMNET divided by four)

NYMEX Henry Hub options and futures combined 0#3CFTC023651

NYMEX Henry Hub futures only 0#1CFTC023651

ICE Henry Hub options and futures combined 0#3CFTC023391

NYMEX Henry Hub swaps options and futures combined 0#3CFTC03565B

NYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C

 (Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Jan Harvey)

 ((sherinelizabeth.varghese@thomsonreuters.com;))