Natural Gas Update 6-19-2025

Overview

Natural Gas--NG is up 1.1 cents
NG is near unchanged as the tone remains supportive with very hot weather set to invade the Eastern portion of the U.S. in the coming days. The spot futures have tested $4.00 yesterday and today. Currently, gas demand from power plants is at its highest since February. (Bloomberg)

The EIA gas storage data showed a build of 95 BCF. This raised total storage to 2.802 TCF. This is +162 BCF/+6.14% versus the 5 year average, but -233 BCF/-7.68% versus last year's storage level.

Heat advisories are up for parts of the Northeast, including Boston, for today while the National Weather Service has just placed a much larger chunk of the Midwest, including the entire state of Iowa, under an Excessive Heat Watch for an extended period of highs in the 90s to 100s beginning this weekend.

The Weather Channel said Wednesday that over the next several days, we're forecasting highs in the 90s to spread over much of the country east of the Rockies. Dozens of locations, especially in the Northeast, will be within striking distance of daily record highs early next week. NY could see a high of 100 degrees next week, which is a temperature not seen since July, 2012. More oppressive humidity will accompany the heat wave late this week into next week.

Yesterday saw the next day Henry Hub cash rise to its best value since mid-April. The price for the next day cash gas seen early on Wednesday morning was $3.60. The cash futures differential thus narrowed to about 37 cents, down from Monday's differential of 80 to 82 cents.

In the NG options on the CME on Wednesday, the October/January minus $1.00 call traded versus the minus 80 cent call in a spread that went in a 1x2 ratio--with the buyer of the -$1.00 call paying 1.3 cents versus selling twice as many of the -80 cent calls. Also in the NG options on the CME, the October $3.85 puts were purchased at a cost of 38.3 cents with delta October futures buys at a price of $4.09.

Technically momentum remains positive for the NG basis the DC chart and is not yet overbought. Upside resistance comes in at $4.045-4.050 and then at 4.141-4.148. Support lies at 3.860-3.864.

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