Natural Gas Update June 4,2025

Overview

Natural Gas--NG is down 2.5 cents
NG spot futures are slightly lower as a supportive mid-June weather outlook and reduced gas production are offset to some degree by lingering LNG outages that have seen feed gas demand fall.

Forecaster Atmospheric G2 stated on Tuesday that temperatures are expected to be above normal across most of the central and eastern US for June 8-12, which was seen supporting prices. S&P Global Commodity Insights says that rising temperatures across the Northeast this week will lift U.S. Lower 48 gas-fired power demand to its highest since February. Demand is expected to crest around 37.5 BCF/d from June 6-8. Looking ahead, U.S. power burn could reach 40 BCF/d by mid-June, according to the S&P forecast.

Pipeline flows currently show U.S. domestic natural gas production down another 0.3 BCF/d on the day at 103.95 BCF/d today and the lowest since Feb. 22. Production averaged 106.33 BCF/d over the previous 30 days, according to Bloomberg data.

Natural gas deliveries to US LNG terminals averaged 13.53 BCF/d in the seven days to June 4, compared to the seven-day average of 14.58 BCF/d during the previous period. (Bloomberg)

Next-day prices at the U.S. Henry Hub benchmark in Louisiana were trading around $3 per mmBtu.  Reuters points out that low cash prices kept pressure on futures prices in recent weeks. 

EU gas storage net injection rates have risen above normal in the last week and to the highest since June 2022 on June 1, Gas Infrastructure Europe data shows. Injection rates so far this summer season are just over 3.1% higher than the previous five year average. European gas storage is up to 49.2% full on June 2, according to GIE compared to the previous five-year
average of 60.0% full. But, several European gas storage facilities remain unusually empty two months into the official stockpiling season, Bloomberg reports. Some operators of gas storage sites haven’t been able to auction capacities at cost-covering prices this year, due to an insufficient gap between summer and winter TTF contracts, Bloomberg says. In the near-term, risks are that prices could spike later this year if not enough gas is accumulated ahead of winter, or if the weather turns unexpectedly cold. 

Asian JKM prices are expected to remain rangebound during the week of June 2-6, Platts said, although Asian spot LNG prices have trended downwards recently as end-user buying activity remains limited. Additionally, sources told Platts there is ample supply on the water, with more expected to arrive in Asia next month due to the previously open arbitrage window. China's LNG demand is still weak heading into summer - traditionally a peak consumption period - amid subdued downstream demand and ample alternatives, Platts said. Typically, Chinese buyers begin spot LNG purchases in May. Milder temperatures in China have dampened demand, while powergen consumption is low amid cheaper alternatives. Industrial demand is also sluggish. Offsetting this is the prospect for more demand from Japan and South Korea due to hotter temperatures.

Technically, price action and momentum remain positive overall. Upside resistance is seen at 3.764 and then at 3.840. Support lies at 3.608-3.613 and then at 3.527-3.531. The spot futures continue to test the DC chart's 100 day moving average that lies at 3.701. Notable from the July NG daily chart is the testing of the downtrend resistance line the past 2 days. That line intersects today at 3.726.

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