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- Natural Gas Update August 18,2025
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Overview
Natural Gas--NG is down 7.5 cents
NG futures are lower as a cooler forecast and lower LNG feedgas volume back under 16 BCF/d are weighing on prices.
In Europe, the spot TTF futures price is now slightly higher versus Friday's settlement after falling overnight to its lowest price since May 17,2024. The price was pressured by the talks to be held today between Presidents Trump, Zelensky and European leaders. The belief is that a peace deal will open the door to more Russian supply coming to market. (Bloomberg). ING points out that the weakness in the TTF price seen in recent sessions has caused the JKM to TTF premium to widen, which will divert LNG cargoes to Asia. But, they add :" However, with EU gas storage almost 74% full and still lagging both last year’s levels and the 5-year average, Europe will need to continue to see strong LNG inflows in order to get close to the 90% storage target." Possibly supporting TTF prices is news that Norway reported an unplanned outage at its Hammerfest LNG export plant this weekend. Hammerfest LNG plant is the largest export facility for LNG in Europe. Technically, the spot TTF futures have attacked the DC chart's lower bollinger band the past 2 sessions.
Key demand areas like Texas and the Eastern portion of the U.S. are set to see temperatures fall to below normal in the 7 to 14 day period. Washington, DC will see temperatures in the next 14 days running anywhere from 1 to 13 degrees below average. Houston, TX will see temperatures in the 4 to 10 day period falling 2 to 4 degrees below normal.
Today, Bloomberg data has LNG feedgas (preliminary) volume at 14.27 BCF/d. Last Thursday, that volume was at 15.77 BCF/d.
On Friday, Henry Hub next day cash natural gas was quoted 2.96/2.97 versus September NG printing 2.942 at that time. Thus the minus 17 cent differential for futures versus cash seen Wednesday had shrunk today to -2 to -3 cents.
LSEG forecast that the week ending Friday Aug. 15 had demand forecasted at 111.7 BCF/d for the week, while this coming week would have demand of 110.9 BCF/d. These 2 weeks forecasts were -0.8 BCF/d lower than those seen Thursday. The forecast for next week is for demand equaling 109.6 BCF/d.
Friday's NG futures rally was seen due to a hotter forecast than normal through the end of August, as per Reuters reporting. Also several sources say that short covering, profit taking was a cause for some of Friday's rally.
CFTC data showed money managers added 23,025 contracts to their net short total in the week ended Tuesday Aug. 12. That brought their net short total up to 50,752 contracts.
The Desk commented that currently the rate of gas injections into storage this season is 23% above the 5 year average. If the 5 year average refill rate of 9.1 BCF/d continued through the end of the injection season, gas inventories would end the season (EOS) at 3.949 TCF, which would be 196 BCF over the 5 year average of 3.753. Last week NGI suggested that EOS inventories would be 3.952 TCF. The EIA in their STEO released last Tuesday dropped their EOS from July's forecast of 3.910 to 3.872 TCF.
The Baker Hughes gas rig count showed an decrease of 1 unit in Friday's report.
Technically NG spot futures have momentum basis the DC chart that is trying to remain positive. Support for the spot futures is seen at the lows from last week at 2.764-2.774 and then at 2.688 from lows from October/November 2024. Resistance comes in at 2.884 and then at 2.932-2.935.
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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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