July Nymex natural gas (NGN26) on Monday closed up +0.020 (+0.62%).
Nat-gas prices rallied to a 3-week nearest-futures high on Monday and settled higher as forecasts for hotter US weather indicate higher nat-gas demand for gas-fired electricity.
Forecasts of warmer-than-normal US weather are supportive of nat-gas prices, as warmer temperatures may boost nat-gas demand from electricity providers to power air-conditioning. The Commodity Weather Group on Monday said above-average temperatures are expected across most of the US from July 2-6.
US (lower-48) dry gas production on Monday was 109.6 bcf/day (+1.5% y/y), according to BNEF. Lower-48 state gas demand on Monday was 71.0 bcf/day (-2.0% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Monday were 19.3 bcf/day (+0.9% w/w), according to BNEF.
Nat-gas prices have medium-term support on the outlook for tighter global LNG supplies. On March 19, Qatar reported “extensive damage” at the world’s largest natural gas export plant at Ras Laffan Industrial City. Qatar said the attacks by Iran damaged 17% of Ras Laffan’s LNG export capacity, a damage that will take three to five years to repair. The Ras Laffan plant accounts for about 20% of global liquefied natural gas supply, and a reduction in its capacity could boost US nat-gas exports. Also, the closure of the Strait of Hormuz due to the war in Iran has sharply curtailed nat-gas supplies to Europe and Asia.
Projections for higher US nat-gas production are negative for prices. On June 9, the EIA raised its forecast for 2026 US dry nat-gas production to 111.0 bcf/day from a May estimate of 110.6 bcf/day.
As a positive factor for gas prices, the Edison Electric Institute on June 10 reported that US (lower-48) electricity output in the week ended June 6 rose +2.13% y/y to 83,866 GWh (gigawatt hours), and US electricity output in the 52 weeks ending June 6 rose +2.25% y/y to 4,341,775 GWh.
Last Thursday’s weekly EIA report was bullish for nat-gas prices, as nat-gas inventories for the week ended June 12 rose by +73 bcf, below expectations of +80 bcf but right on the 5-year weekly average. As of June 12, nat-gas inventories were down -1.5% y/y, and +5.8% above their 5-year seasonal average, signaling adequate nat-gas supplies. As of June 20, gas storage in Europe was 46% full, compared to the 5-year seasonal average of 61% full for this time of year.
Baker Hughes reported last Thursday that the number of active US nat-gas drilling rigs in the week ending June 19 rose by +1 to 122 rigs, well below the 2.5-year high of 134 rigs set in February 2026.
