Natural Gas Market Analysis - July 2025
Market Overview
During the week of July 6–12, 2025, natural gas prices experienced mixed movements as strong cooling demand coincided with solid supply and storage conditions. The market's focus remained on weather-driven power sector demand, which kept a supportive tone despite a slight dip in benchmark prices.
Storage Report Insights
The latest EIA storage report revealed a 53 Bcf injection, which was below the expected 60 Bcf consensus. This figure matched the five-year average but was 8 Bcf lower than the same week last year. The total storage now stands at 3,006 Bcf, which is 6% above the five-year average but 6% below last year's level. The smaller-than-expected build indicates stronger demand, particularly in the power sector, providing a short-term bullish sentiment in the market.
Demand Dynamics
Extreme temperatures across the eastern U.S. have significantly increased cooling load, with over 125 million Americans under heat advisories. This surge in demand for natural gas used in electricity generation rose by 0.4 Bcf/d week-over-week, reflecting a 1.0% increase according to S&P Global. The power sector remains the primary demand driver this summer, and the ongoing heat wave is expected to sustain this trend.
Supply Considerations
Supply saw a modest decline last week, with total gas output falling by 0.6% to 106.2 Bcf/d. Net imports from Canada also decreased slightly. Rig count data indicates that producers are maintaining steady operations with minimal adjustments in key basins. This slight drop in production suggests ongoing capital discipline, which could become more significant if demand continues to exceed expectations.
LNG Export Recovery
After maintenance shutdowns, LNG feedgas demand rebounded, averaging 16.0 Bcf/d, with Gulf Coast terminals leading the recovery. A total of 27 LNG cargoes departed U.S. ports during the week, indicating a return to full operational capacity.
Conclusion
Despite a slight dip in the Henry Hub spot price to $3.08/MMBtu, the fundamentals of the natural gas market remain relatively balanced. Continued heat-driven demand, a bullish storage miss, and support from LNG exports are expected to maintain a price floor in the near term. However, upside potential may be limited by healthy storage levels and sufficient supply.