Natural Gas Update 6-27-2025

Overview

Natural Gas-- NG is up 7.4 cents
NG prices are higher today as above normal temperatures are forecast for the southeast and northwest, as per the NOAA. A technical bounce after the sharp selloff seen this week is likely also boosting gas prices.

Average Lower 48 temperatures are still forecast above normal throughout the coming two weeks. NOAA 6-14 day forecast shows above normal temperatures focused in the southeast and northwest. The GFS 6z 15day has risen over 5 CDDs nationally.

The EIA NG gas storage built by 96 BCF, which was 7-8 BCF more than forecast, marking the 10th consecutive week of above-average injections, driving NG futures prices to a fresh low for the day. Total storage rose to 2.898 TCF, which is now +179 BCF / +6.58% versus the 5 year average, but still -196 BCF / -6.33% versus last year's level. Initial estimates seen for next week's EIA storage data are calling for a build of 51 to 52 BCF. The 5 year average build for the period is +61 BCF and last year's build for the week was +35 BCF. 

July futures expired weakly as the price fell to its lowest value since December 17 basis the July daily contract. The first month spread widened to as much as -27.0 cents. The July futures fell to converge with the next day Henry Hub cash, after being as much as 80+ cents above the cash price on June 16. 

In NG / LN options, 1,850 lots of the October $4.25 calls were bought at a cost of 18.6 cents. Coupled with the option was a delta sale of October penultimate futures at $3.58. In the NG/LN   the August 2025 $3.25 Put was bought with delta August futures buys at $3.43. The options traded 13.7, 13.8 and 13.9 cents in some volume ; a total of 4,500 lots went in the put option.  Also in NG/LN options, the October January 3 month CSO -75 cent call traded 1,000 times each at 2.0 and 1.9 cents. These were opening trades for the most part given the open interest increase seen in CME data. 

Technically on Thursday, the futures tested the lower bollinger bands on the August daily and DC chart bases. There is now a rollover gap on the DC chart. The gap goes from July's high of 3.425 seen yesterday to today's August low of 3.513. Support for the August futures lies at 3.527-3.530 and then at 3.453-3.454. Resistance comes in at 3.684 and then at 3.760-3.764.

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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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