Natural Gas Update May 30,2025

Overview

Natural Gas- NG is down 4.2 cents

NG futures are lower now after rallying overnight with the prospect remaining of "cooldown" in Texas and the South. The prospect of further 100 BCF injections in the coming weeks after the prior 5 weeks of triple digit injections is also seen weighing on prices.

NatGasWeather.com says in a note: "There were no major changes in the overall weather picture for the coming week, with a cooldown in Texas and the South and strong demand in California and the Southwest. But, NatGas adds : "Further out, the expectation is heat impresses for much of the 2nd half of June for strong national demand." (WSJ)  The Commodity Weather Group added to the lower weather demand saying Thursday that forecasts have turned cooler for the central U.S. for June 3-7.

The EIA statistics disappointed again Thursday with a larger than expected build. Storage rose by 101 BCF, exceeding news wire survey forecasts by 2 to 8 BCF. Total storage rose to 2.476 TCF. This is +93 BCF/ +3.90% versus the 5 year average and -316 BCF/-11.32% versus last year. The 101 BCF injection made it the 5th straight week of a triple digit build. Celsius Energy says that the record for 100+ injections in a row is 7 weeks back in May-June 2014. The estimates we have seen of +106/+109 BCF for next week's data point to a 6th week of over 100 BCF being added to storage. In next week's data, last year's build was 94 BCF and the 5 year average build for next week is 98 BCF.

In the NG market on Thursday, we saw several large trades. In the LN/NG options, the $3.75/$6.50 call spread in October was bought at a cost of 33.5 cents with delta futures sold at $3.63 in the trade. The October 2025 futures settled Thursday at $3.676. Also the April 2026 / October 2026 futures spread traded on separate legs. 2,000 contracts of the April 2026 futures were bought at $3.80 against simultaneously selling of 2,000 of the October 2026 futures at $4.173, thus at a spread differential of 37.3 cents. The April October 2026 spread settled Thursday at 37.2 cents. In the April October 2026 6 month calendar spread put options, the minus 75 cent put was purchased versus selling of the minus $1 put for a cost of 2.3 cents. Additionally in the April October 2026 6 month calendar spread put options, the minus 40 cent put was actively purchased for a cost of 12.3 cents.  The September $5.00 call open interest rose by 4,801 contracts. The September $5 call was sold versus the September $3.50 straddle (put and call) being bought for a total cost of 72.6 cents. The October $3.75/$6.50 call spread traded in a 1 for 2 ratio at a cost of 33.5 cents with delta October futures sold at $3.63.

Technically, the spot futures again went up to test the 50 day moving average on the DC chart. The 50 day moving average lies today at 3.528. DC chart based support is seen at 3.423-3.427 and then at 3.335-3.340. Resistance comes in at yesterday's high at 3.576.  Momentum basis the DC chart is positive.

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