Natural Gas Update August 26,2025

Overview

Natural Gas--October NG is up 1.9 cents
NG futures are slightly higher as the September options expire today. The tone of the market remains overall bearish given the low weather demand heading into September, but LNG feedgas demand has rebounded in the past week, offering some support.

We saw the following commentary on the WSJ wire Monday quoting an analyst : "Some support will come from the potential reversal of coal activations we saw earlier in the summer as gas prices rose. Operators with both resources should switch back to gas at these price levels, even for winter." A further comment written Monday said :"Last week’s sell-off has left traders with little reason to expect a bounce back in prices anytime soon." The commentaries seen, in general, cited ample supply, mild weather forecasts, but strong LNG demand.

LNG feed gas demand during the week of Aug. 15-21 averaged 14.6 BCF/d, 7.9% lower than the week prior average of 15.7 BCF/d. But, demand has picked back up over the last four days and is in line with August, averaging 15.6 BCF/d through Monday, Wood Mackenzie data showed. This brings the monthly average to 0.51 BCF/d above the summer injection season average of 14.8 BCF/d.  (NGI)

U.S. domestic natural gas production was estimated at 109.2 BCF/d yesterday compared to an average of 108.7 BCF/d over the previous week, according to Bloomberg data.

In Asia, buyers stepped up LNG imports last week to replenish inventories after the summer. Imports into China, Japan, and South Korea increased on a 30-day average, with Beijing’s daily intake at its highest since January, according to ANZ Research. (WSJ)

Reuters recently highlighted how U.S. LNG exports will soar by roughly 10% a year through 2030 as energy firms double their LNG production capacity, according to analysts. U.S. LNG exports are on track to soar from a record 11.9 BCF/d in 2024 to 21.5 BCF/d in 2030, according to a U.S. EIA outlook.  At the same time, the EIA projects U.S. gas production to rise from  a record 103.6 BCF/d in 2023 to around 113.5 BCF/d in 2030. NG output is seen having averaged 108.5 BCF/d so far in August, as per LSEG data.

Early estimates we have seen for this week's EIA storage data are calling for a build of 25 to 27 BCF. This compares to last year's build of 35 BCF and the 5 year average build of 38 BCF.

Today is the last trading day for the LN September options. Open interest from the CME shows the following nearby strikes with the largest amounts open as of Monday's close. The $2.75 put has 19,658 contracts open. The $2.60 put has 11,622 contracts open. The $2.50 put has 36,720 contracts open. The $2.75 calls have 7,859 contracts open. The $2.80 calls have 9,000 contracts open, as the contract saw 4,035 contracts of positions added in Monday's trade. 

Technically the October NG futures have momentum that is still negative, but it is near oversold and looks poised to turn positive. The contract bounced off the daily chart lower bollinger band yesterday and filled the gap created over the weekend. Upside resistance for the October futures lies at 2.866-2.869 and then at 2.933. Support comes in at the low seen in Monday's session at 2.738 and then at 2.699-2.705 from values from the DC chart.

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