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- Natural Gas Update 6-26-2025
Overview
Natural Gas--August NG is down 2.8 cents
NG prices are lower again today with today's expiring July contract at a near 1 month low for the spot futures. Cooler weather, high gas production and a slow return from maintenance of LNG feed gas volumes are weighing. Also weighing on NG prices is the expectation for another above average storage injection in today's EIA data
As the NGI headline said Tuesday: "Storage Concerns Looking ‘Significantly Less Likely’. This was reflected in the October/January NG spread that fell to its widest value. The futures spread settled $-1.273 on Wednesday. The October January 3 month -75 cent call calendar spread option was purchased for 2 cents in a trade seen as an an initiating position, given open interest in the option rose in CME data.
The WSJ & Reuters surveys for the EIA gas storage data to be released today are calling for a build of 88 to 89 BCF. This compares to last year's build of 59 BCF and the 5 year average build of 79 BCF.
This week, LSEG reported average gas output in the Lower 48 states rose to 105.5 BCF/d in June, up from 105.2 BCF/d in May. Meanwhile, gas flows to the eight major U.S. LNG export plants fell to 14.1 BCF/d in June from 15.0 BCF/d in May, largely due to seasonal maintenance. (Trading Economics)
The European TTF spot futures have fallen to their lowest value seen since June 2nd. The easing of tension in the Mideast has been the main driver for the retreat in European gas prices this week, with speculative positioning prior to this week having risen to a very high level. The retreat in prices comes even as very high temperatures are set to invade some portions of Europe in the coming days.
The U.S. front month arb to Northeast-Asia (via the Cape of Good Hope) has opened up for the first time in over 2 months, currently assessed at $0.061 and marginally incentivising prompt U.S. cargoes to deliver to Asia, according to Spark Commodities. Atlantic LNG arbs for the U.S. via the Cape, U.S. via Panama and Nigeria are all pointing to Asia and at their highest levels in over 9 months, since September 2024. (Market News)
There were large open interest increases in the $4.50 and $5.00 calls for August seen from CME data from Thursday's activity. The 2 calls were a part of the August $4.00/$4.50/$5.00 call butterfly that traded at a cost of 4.5 cents to the buyer of the wings. Additionally, the $4.50 August call was sold against a purchase of the $3.25 put for a cost to the put buyer of 3.6 cents, with delta futures in August bought at $3.63. Also, noticeably the October $2.25 put open interest rose by 4,785 contracts in Wednesday's CME data. The put was sold 2 times against the purchase of the $2.50 October put. The buyer of the $2.50 put collected 0.3 cents for selling twice the amount of the $2.25 puts.
Technically NG has negative momentum that is not yet oversold. August futures support at 3.518-3.524 was tested overnight with a low of 3.522. Below that support is seen at 3.443-3.445. Resistance comes in at 3.642-3.649. Above that resistance lies at 3.709-3.715.
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Disclaimer
This article and its contents are provided for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any commodity, futures contract, option contract, or other transaction. Although any statements of fact have been obtained from and are based on sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed.
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