Natural Gas Update July 17,2025

Overview

Natural Gas- NG is up 5.7 cents
NG spot futures are up again today. Support has come in the past few sessions from expectations for heat into the end of the month and the strong LNG feed gas demand volume seen of late.

Meteorologists forecast the weather in the Lower 48 US states would mostly remain hotter than normal through at least July 31 with the hottest days of the summer expected next week. In New England, extreme heat Wednesday caused energy prices to spike; spot gas prices soared by 61 per cent to $12.50/ MMBtu, their highest since February.  (Reuters)

A Reuters headline today notes that Freeport's LNG plant is ramping up and is thus heading back to full power, as per LSEG data.

The EIA gas storage data due out today is seen as a build of 46 to 47 BCF as per WSJ and Reuters surveys. This compares to last year's build of 18 BCF and the 5 year average build of 41 BCF.

On Wednesday, LSEG forecast average gas demand in the Lower 48, including exports, would slide from 109.8 BCF/d this week to 107.6 BCF/d next week. These forecasts were up a total of 2.8 BCF/d versus those seen Monday.  

Notable open interest increases seen from the CME from Wednesday's activity were in the September $2.00 put and the November $2.50 put strikes. The September $2.00 put was seen sold 2 times against the purchase of the $2.50 put at a cost of 0.8 cents to the $2.50 put buyer. The November $2.50 put traded 3.2 cents.

An article seen points out that natural gas storage facilities are not keeping up with production and that in the future that will present a problem as LNG exports rise and the expected demand from AI centers will overwhelm storage capabilities. Data centers and AI could create a spike in power demand, with their share of power consumption forecast from about 4.4 percent of U.S. electricity consumption in 2023 to as much as 12 percent by 2028, according to the U.S. Department of Energy. Enverus analysis sees Gulf Coast LNG export demand rising by 10 BCF/d by the end of the decade and they add that this demand will come on stream "well before" new storage facilities are built. Natural gas production has risen by an average of 4.7 percent a year from 2013 to 2023, according to the American Gas Association. Underground natural gas storage capabilities, meanwhile, have grown by 0.1 percent annually from 2014 to 2023. But bringing underground storage online takes years and some environmental groups and neighbors of gas facilities worry about safety risks. The process to create salt-dome storage starts with water — lots and lots of water. Disposing of the extra salty water is another issue.  (eenews.net)

Technically momentum remains positive for the NG basis the DC chart as the stepladder up pattern continues. Resistance for the spot futures is seen at 3.635-3.644 and then at 3.747-3.751. Support is seen at the 3.500 area and then at 3.453-3.454.

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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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