Natural Gas Update 6-25-2025

Overview

Natural Gas---August NG is down 1.6 cents
NG prices are slipping a bit further overnight as temperatures are seen reverting to near normal after the current heat wave along the U.S. East Coast ends in the next 24 hours.

Forecaster Atmospheric G2 said Tuesday that forecasts shifted cooler for parts of the southwestern and south-central US for June 29-July 3.  (Barchart.com) NatGas Weather cites strong wind and solar generation as also having pressured gas prices on Tuesday. (Dow Jones)

The July NG / LN options expire today. The open interest on the CME for the $3.50 calls is 11,648 contracts, while the $3.50 puts have 27,893 contracts open. The $3.60 puts have 13,348  contracts open. 

The European Union's member states have reached an agreement with the EU Parliament to loosen the EU's rules on filling gas storage. Governments had backed plans already in April to soften the rules before winter. Member states are now allowed to meet the 90% target for filling storage anytime between October 1 and December 1.  Once the 90% target is met, it should not be required to maintain that level until 1 December. The EU's member states should also have the possibility to deviate by up to ten percentage points from the filling target in case of difficult market conditions. (Reuters)

Shipping costs for liquefied natural gas cargoes have rallied to their highest in about eight months with vessel availability tightened by a shift in more ships heading to Asia at the same time as conflict has escalated in the Middle East. In the past two weeks however, it has become equally profitable to deliver LNG to both Europe and Asia, so spot cargoes are now incentivised to travel to Asia via the Cape of Good Hope, increasing average voyage times and reducing vessels available for charter, as per one commodities analyst cited by Reuters. 

NGI commentary suggests that "A combination of robust domestic cooling needs and mounting calls for exports is widely expected to send natural gas demand surging through the balance of summer in the South Central region of the Lower 48. This could minimize storage injections and bolster Permian Basin spot prices."

Technically NG futures have negative momentum. August futures have support at 3.610 and then at 3.518-3.524. Resistance lies at 3.733-3.726 and then at 3.817-3.820.

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