Natural Gas Update July 31,2025

Overview

Natural Gas--NG is unchanged
NG prices are near unchanged now after slipping overnight with the following comments underscoring the tone of the market: "there just aren’t any meaningful, attractive bullish catalysts out there right now." "we are not trading  August".  Strong gas production, a slight slippage in LNG feed gas demand, a cooling down period in the weather in the coming days and an above normal storage injection due today all contributed to the weakness in prices over recent days.

September NG started its reign as the spot futures with weakness Wednesday as next day cash slid back under $3 on the prospect for cooler/below normal temperatures along the East Coast in the August 4-8 time period. Also the loss of some power at Freeport's LNG plant weighed on prices.  

Yet, the weakness in natural gas prices masks the fact that yesterday saw the 2nd highest daily gas power burn on record, as per Celsius Energy data. This power burn came as otherwise of late, gas' portion of power generation has "not impressed"  as it has ceded some of its share to coal and renewables.

The EIA gas storage is seen rising by 36 BCF as per the WSJ survey. That compares to last year's build of 18 BCF and the 5 year average build of 24 BCF. This survey estimate is well below some other estimates we have seen of +42 (Celsius Energy) and +48 BCF (NGI model).

Morgan Stanley sees upside to NG prices n 226, despite the recent weakness and the higher than average amount of gas in storage. Despite recent increases in drilling activity, investment levels are still below what the market needs to meet rising LNG demand into 2026. In addition, with prices back near $3, further rig additions may start to get deferred again. Morgan Stanley says : " we continue to forecast prices rising over $5, but now expect this to occur in 1H26 vs 2H25 prior.” (Investing.com)

European gas prices have rallied this week, mostly driven by the threat of competition in Asia, according to trading firm Mind Energy. In a recent note, analysts wrote that sweltering summer heat in East Asia has helped drive a three-day rally in TTF prices. East Asia LNG prices have ticked up above the $12/MMBtu range as cooling demand remained high, but have been partially capped by heightened coal consumption and additional spot cargoes from commissioning terminals like LNG Canada. (NGI)

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