Natural Gas Update August 15,2025

Overview

Natural Gas--NG is up 7.0 cents
September natural gas futures are higher today continuing the somewhat positive move seen yesterday. Futures have been helped the past 24 hours by stronger feedgas volume, a better demand forecast and a slight reduction in production. All that even as Thursday's EIA number raised the surplus to the 5 year average.

LSEG on Thursday showed August U.S. average natural gas production at 108.1 BCF/d. This is down 0.2 BCF/d from the average they showed Tuesday of 108.3 BCF/d.

On Thursday, LSEG projected average gas demand in the Lower 48 states, including exports, would ease from 111.9 BCF/d this week to 111.5 BCF/d next week.  These forecasts were up 1.0 BCF/d total from those seen Wednesday and followed the increase of 2.8 BCF/d in the demand forecast seen Wednesday from Tuesday.

Freeport LNG's export plant in Texas was on track to take in more natural gas on Thursday in a sign that one of its liquefaction trains exited a short-term outage on Wednesday, according to a company filing with state regulators and gas flow data from LSEG. Freeport told Texas environmental regulators that one of three liquefaction trains at the plant, Train 2, shut on August 13 due to a problem with a compressor system. LSEG said the amount of gas flowing to Freeport was on track to reach 2 BCF/d on Thursday, up from 1.6 BCF/d on Wednesday. That compares with an average of 1.9 BCF/d over the prior seven days. The three liquefaction trains at Freeport are capable of turning about 2.1 BCF/d of gas into LNG. (Reuters)

The EIA gas storage number issued Thursday showed an increase of 56 BCF. This raised total storage to 3.186 TCF. This is +196 BCF/+6.56% versus the 5 year average, but -79 BCF/-2.42 % versus last year's level. The storage number in widening the current storage surplus to the 5 year amount further underscores less worries over a supply shortage come the winter. This looks to have been reflected in NG futures pricing again Thursday. Similar to Wednesday, on Thursday in NG futures, the winter strip lagged behind the front 2 months. September futures settled up 1.3 cents and October settled up 2.0 cents, while the December through March portion settled down between 2.6 and 4.2 cents.

On the CME Block board on Thursday, 1,300 lots of November and December call spreads traded as one trade. The November $3.75 / $4.00 call spread was sold -collecting 5.6 cents---against which the December $4.25 / $4.75 call spread was bought at a cost of 11.6 cents. Also Thursday, the October January 3 month Calendar Spread Options traded. The -$1.25 put was bought versus selling of 2 of the -$1.75 puts for a cost of 11 cents to the -$1.25 put buyer. And also in the October January 3 month calendar spread options, 4,000 contracts of the -$1.00 calls traded 3.5 cents. The majority of this call option trade was an initiated position as per CME open interest data.

A colleague suggests that NG futures are settling into a range: "This is a new consolidation range being formed ; for simplicity and utilizing major option points of $2.50 and $3.00. With it being “new” I do expect to see some decent volatility to test the extremes but expect both the $3 and $2.50 to hold till later in consolidation cycle."

Technically spot NG futures have risen above resistance at 2.881-2.887. Next resistance lies at 2.983-2.985 and then at 3.074-3.078. Support comes in at 2.858-2.859, which is above the overnight low of 2.836. Below that support lies at the prior 3 days' lows between 2.764-2.774. Momentum has turned positive basis the DC chart with the uptick in prices seen the past 24 hours.

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