Natural Gas Update July 3,2025

Overview

Natural Gas--NG is up 4.6 cents
NG futures are up further today as demand forecasts for the coming weeks have been raised. Support may also be coming from an EIA storage number today that is seen reducing the surplus to the 5 year average.

The EIA gas storage data is seen as a build of 47 to 53 BCF. This compares to last year's build of 35 BCF and the 5 year average build of 61 BCF.

LSEG raised their forecast for this week's demand by 1.1 cents from that seen Monday. This week's demand is seen at 106.1 BCF/d. Additionally, LSEG raised their Total Degree Days (TDD) for the coming 2 weeks. LSEG estimated 206 total degree days over the next two weeks, compared with 182 estimated on Tuesday. Normal for this time of year is 172 TDDs.

Financial firm LSEG said average gas output in the Lower 48 U.S. states has eased to 106.2 BCF/d so far in July, slightly down from 106.4 BCF/d in June.

Notable in Wednesday's option trading on the CME is the very large open interest increase in the September $3.75 call strike. The October $3.75 call also saw a large open interest increase. Trades were seen in both September and October of purchases of the $3.75 call versus the $4.75 call at a cost of 20.75 cents with delta sales in September at $3.56. The $4.75 open interest fell in both September and October, but by less than the $3.75 strike increases. Another notable trade was the purchase of the $3.75/$4.00 call spread for a cost of 7.1 cents. 6,000 contracts of this call spread traded. There was a large open interest increase in the August puts, notably in the $3.10, $3.00 and $2.75 strikes. The $3.00 August puts were bought at a cost of 5.6 cents with delta penultimate futures bought at $3.43. The $3.00 put was also sold against purchases of the $3.25 August put at a cost to the buyer of 7.4 cents. There were purchases seen in the December $10.00/$12.00 call spread, which traded 1.25 cents.

On the CME, in the TTF options, a trade in October was seen of purchases of the Euro 35 put versus selling of the Euro 30 put with delta futures buys at Euro 35. The recent heat wave that gripped much of Southern Europe is set to ease and wind generation is seen picking up. But, North Asia LNG prices edged higher amid renewed buying interest from importers, as per ANZ ban analysis. (seeking Alpha) Technically the attached chart of the nearby TTF futures shows momentum turning upward from a nearly oversold condition. Also the TTF futures chart shows a stepladder up look from the past 4 sessions.

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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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