Natural Gas Update August 7,2025

Overview

Natural Gas-- NG is up 2.0 cents
NG spot futures are higher having risen to a fresh high for the week as the market is supported by expectations for a lower than average build in today's EIA storage data and by the forecasts for more hot weather in the Eastern U.S. next week.

The WSJ survey for the NG EIA number for today is calling for a build of 18 BCF. That would be the smallest injection for the period in the past 6 years. Last year saw an increase of 21 BCF. The 5 year average increase is 29 BCF. The forecasted build would be the smallest since April.

Henry Hub next day cash prices rose Wednesday to over $3, thus giving NG futures a boost. The cash futures differential is flat at current after last week when the September NG futures held a premium of 5 cents or more to the next day cash.

Other factors cited for the strength in futures seen Wednesday were the pickup in LNG feedgas volume, a slight dip in gas production and the forecast for some heat in the eastern portion of the US. Washington DC will see highs of 2 to 4 degrees over normal for a stretch of 7 days coming up. Philadelphia will see highs 3 to 6 degrees above normal over a similar period and NY will have highs 5 to 9 degrees above average. Boston will be over normal by 8 to 12 degrees for a short stretch next week. Forecaster Atmospheric G2 said Wednesday that forecasts shifted warmer for much of the U.S. for August 11-15 and shifted warmer over the eastern two-thirds of the country for August 16-20. (Barchart)

LNG feedgas demand has picked up, averaging 15.9 BCF/d so far in August, compared to 15.5 BCF/d in July. This uptick follows the return of Freeport LNG’s Texas facility from outages and strong intake at Venture Global’s Plaquemines plant in Louisiana, which reached a record 3.2 BCF/d. (Reuters)

Bank of America has reduced its natural gas price forecast for September-December 2025 to $3.0/mmbtu, citing persistent loose market balances despite record summer heat. The fourth hottest June-July period in 30 years has been insufficient to tighten the natural gas market, as production growth and power sector looseness exceeded 6 BCF/d year-over-year, outpacing the 3.3 BCF/d increase in LNG demand. BofA analysts project end-of-summer inventories will reach approximately 3.93 Tcf, with western U.S. and Canadian regions rapidly refilling stocks. The bank warns that natural gas could get pushed back to the Midwest and Eastern U.S. this fall. Other estimates we have seen for end of season storage are the EIA's estimate of 3.910 TCF and the Desk's survey estimate of 3.905 TCF. (Investing.com)

Technically in recent days, we have spoken of a range bound NG market and a price waffling around $3. This sentiment seems underscored by a comment seen yesterday: "With this market currently in a low-priced complacent environment, we feel that a sizable miss from average forecasts will be required to swing values much in either direction,".  Support is seen at 3.011-3.016 and then at 2.945-2.955. Resistance lies at 3.140-3.145 and then at 3.186-3.187. Momentum is positive for the NG basis the DC chart. Notable are the higher lows seen in the prior 3 sessions. 

Enjoyed this article?

Subscribe to never miss an issue. Daily updates provide a comprehensive analysis of both the fundamentals and technical factors driving energy markets.

Click below to view our other newsletters on our website:

Daily Energy Market Update

Ethanol Report

Fuel and Freight Daily Report

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.

Commodity trading involves risks, and you should fully understand those risks prior to trading. Liquidity Energy LLC and its affiliates assume no liability for the use of any information contained herein. Neither the information nor any opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any opinions expressed herein are subject to change without notice, are that of the individual, and not necessarily the opinion of Liquidity Energy LLC