Nat-Gas Prices Recover on Strong LNG Shipments

July Nymex natural gas (NGN26) on Friday rose +0.033 (+1.07%).

Nat-gas prices on Friday rallied +1.07%, overcoming part of Thursday’s sharp sell-off of -3.08% that was sparked by news that EIA nat-gas inventories rose by +108 bcf the week ended June 5, above expectations of +100 bcf. 

Nat-gas prices on Friday found support on news of higher gas flows through LNG export terminals, which indicated stronger demand for US gas. 

However, gains were curbed by forecasts for cooler weather in the coming weeks.  The Commodity Weather Group predicted below-average temperatures across the Midwest through June 16.

US (lower-48) dry gas production on Friday was 111.7 bcf/day (+4.2% y/y), according to BNEF.  Lower-48 state gas demand on Friday was 75.9 bcf/day (+9.1% y/y), according to BNEF.  Estimated LNG net flows to US LNG export terminals on Friday were 19.1 bcf/day (+11.9% 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 Tuesday, 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 Wednesday 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.

Thursday’s weekly EIA report was bearish for nat-gas prices, as nat-gas inventories for the week ended June 5 rose by +108 bcf, above expectations of +100 bcf and the 5-year weekly average of +95 bcf.  As of June 5, nat-gas inventories were down -0.8% y/y, and +6.0% above their 5-year seasonal average, signaling adequate nat-gas supplies.  As of June 9, gas storage in Europe was 43% full, compared to the 5-year seasonal average of 57% full for this time of year.

Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ending June 12 fell by -3 to an 8-month low 121 rigs, well below the 2.5-year high of 134 rigs set in February 2026.