Natural Gas Update July 9,2025

Overview

Natural Gas--NG is down 7.1 cents
NG futures have slipped further today as weather demand is not seen as strong enough and storage supplies are seen as ample, underscored by the EIA raising their end of season storage forecast. 

In NG, the EIA's STEO shows End of Season (end of October) gas inventories at 3.910 TCF, which is 5% more than the June forecast and would see inventories end October at 3% above the 5 year average. The greater inventories are a result of more NG production and less demand from the power sector, the EIA said.  The greater inventories has caused the EIA to lower their NG average price forecasts for 2025 and 2026. Henry Hub natural gas prices for 2025 are seen averaging $3.67, which is down 35 cents from last month's forecast. The 2026 NG average price forecast was lowered by 47 cents to $4.41. The EIA expects that natural gas will average just almost $3.40/MMBtu in 3Q25, 16% less than last month’s forecast.

U.S. power consumption will hit record highs in 2025 and 2026, the EIA said in its short-term energy outlook on Tuesday. The demand increases come in part from data centers dedicated to artificial intelligence and cryptocurrency, and as homes and businesses use more electricity and less fossil fuels for heat and transportation. But, the EIA said natural gas' share of power generation would slide from 42% in 2024 to 40% in 2025 and 2026. Coal will see a 1% rise in its share in 2025 from 2024, but will fall back by 2%  in 2026, as renewable output rises. The percentage of renewable generation will rise from 23% in 2024 to 25% in 2025 and 26% in 2026

The fall in natural gas prices has come even as the power burn generation gas figure has been strong, as per Celsius Energy commentary. After a holiday weekend dip in the gas power burn demand, a hot East Coast & weak wind generation sent power burn above 47 BCF/d Monday, up +3 BCF/d vs 2024. The gas share of the power stack was a very strong 45.5%, which is close to 2025 highs. Burns were seen holding steady Tuesday, as per Celsius Energy.

The European Parliament on Tuesday gave its final sign-off on a deal to loosen the EU's rules on filling gas storage. The deal allows EU's member states to achieve the 90% filling target at any point in time between October 1 and December 1, taking into account the start of the member states withdrawal period. Once the 90% target is met, it should not be required to maintain that level until 1 December. (Reuters)

China is not buying LNG on the spot market despite a seasonal increase in demand for electricity for air-conditioning, Bloomberg has reported. The Chinese see the LNG price as expensive. The IEA says :" We expect that China’s LNG imports will remain weak in the second half of the year, amid subdued demand, higher piped gas imports and an uncertain macroeconomic outlook,”. Meanwhile, natural gas deliveries via pipeline from Russia are set to jump by 25%, the IEA also said, suggesting China was being price-sensitive. yet, the IEA adds that China will have to return to the LNG market to import gas to fill their reserves ahead of the winter.

Technically, NG has negative momentum basis the DC chart. Support at 3.260-3.264 has been tested overnight with a low of 2.260. Below that support is seen at 3.214-3.217. Resistance comes in at 3.375-3.381 and then at 3.469-3.472, which are the highs from the prior 2 sessions.

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