NATURAL GAS

Natural gas prices have pulled back from a 2½-month high due to forecasts of normalizing summer temperatures in the U.S., which could reduce cooling demand and electricity generation needs.
Demand Drivers:
U.S. LNG exports are ramping up, supporting demand and prices. LNG export facilities like Plaquemines LNG and Corpus Christi Stage 3 began production in late 2024, with more capacity expected in the next two years.
Domestic demand for natural gas in power generation is expected to rise seasonally in summer, with June electric power consumption projected to be about 25.7% higher than May.
Supply Factors:
U.S. dry gas production remains robust, currently around 106.7 billion cubic feet per day (Bcf/d), up 3.3% year-over-year.
Natural gas inventories are near five-year averages but expected to end the injection season (October 31) about 3% below average due to strong demand and exports.
Price Forecast:
The U.S. Energy Information Administration (EIA) projects Henry Hub spot prices to average around $4.00/MMBtu in 2025 and rise further to about $4.90/MMBtu in 2026, driven by increased LNG exports and domestic consumption growth.
Conclusion
Natural gas prices are currently moderating after recent gains but remain supported by strong export demand and seasonal power consumption increases. The market outlook is for prices to rise through 2025 and 2026 as LNG exports expand and domestic demand grows, despite some short-term weather-driven fluctuations.
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