Natural Gas Market Analysis: July 14, 2025
Author: James Hyerczyk
Published: July 14, 2025
Key Highlights
- U.S. heatwave increases natural gas demand, particularly in the South, Midwest, and Northeast.
- Henry Hub futures remain above $3.30, with resistance at $3.640 and a bullish target of $3.749.
- The EIA reports a 53 Bcf injection, indicating tightening market fundamentals.
Market Overview
Natural gas futures are projected to remain stable or increase during the week of July 14 to July 19 due to a significant heatwave affecting key demand regions across the U.S. Forecasts indicate persistent high temperatures, leading to elevated Cooling Degree Days (CDDs) and increased gas-fired power generation.
Heatwave Impact
High pressure systems are expected to dominate the central and eastern U.S., resulting in daytime temperatures frequently reaching the upper 80s to mid-90s°F. This sustained heat is driving up electricity demand, particularly in regions with heavy Independent System Operators (ISO) like PJM, MISO, and ERCOT. The lack of significant cooling from weather systems suggests that CDD accumulation will remain high, exerting upward pressure on natural gas prices.
Supply and Demand Dynamics
Localized thunderstorms may occur, but they are unlikely to significantly impact overall temperatures or CDD totals. Currently, there are no major threats to production, allowing traders to focus on the demand side of the equation.
The EIA's report on July 11 indicated a 53 Bcf injection, which was below market expectations. Although total inventories are above the five-year average, the trend of lower injections is concerning as cooling demand continues to draw more gas into power generation. With dry gas production steady at around 102 Bcf/d and LNG exports above 13 Bcf/d, the supply-demand balance is tightening, which is supportive of price increases if the heat persists.
Technical Analysis
As of July 11, front-month Henry Hub futures settled at $3.314, with solid support near $3.30. Key resistance is identified at $3.640 (the 52-week Simple Moving Average). If this resistance is breached, bulls may target $3.749, which represents June's swing high. The current heat pattern and slower injection rates provide a pathway for testing this level if weekly fundamentals remain consistent.
Short-Term Outlook
The outlook for natural gas prices is moderately bullish, with a trading range anticipated between $3.30 and $3.749. Key drivers include:
- Persistent national heat
- Lagging storage injections
- Strong power burn
Potential risks to this outlook include cooler weather forecasts, stronger-than-expected storage builds, and reduced LNG flows. Unless there are significant shifts in weather models or a sharp rebound in storage levels, futures are likely to trend higher as the July 19 close approaches. Traders are advised to monitor midweek heat updates and the Thursday EIA report for further insights.
Conclusion
The natural gas market is currently influenced by a combination of high demand due to extreme weather conditions and tightening supply dynamics. Traders should remain vigilant and responsive to changes in weather forecasts and market reports to navigate this volatile environment effectively.