Nat-Gas Prices Rebound on Hot US Temps and Strong LNG Exports

August Nymex natural gas (NGQ26) on Tuesday closed up +0.094 (+2.96%).

Nat-gas prices recovered from a 1.5-week low on Tuesday and settled sharply higher.  Above-normal US temperatures and increased US LNG exports pushed nat-gas prices higher on Tuesday.  The Commodity Weather Group on Tuesday said forecasts remained hot, with above-average temperatures expected across the eastern half of the US through July 4, potentially boosting nat-gas demand from electricity providers to power air-conditioning.

Strength in US LNG exports is shrinking domestic supplies and is also bullish for prices.  BNEF gas data showed estimated gas flows to LNG export terminals on Tuesday rose to 19.7 bcf/day, the most in more than two months. 

US (lower-48) dry gas production on Tuesday was 112.2 bcf/day (+2.9% y/y), according to BNEF. Lower-48 state gas demand on Tuesday was 79.4 bcf/day (+3.4% y/y), according to BNEF.  Estimated LNG net flows to US LNG export terminals on Tuesday were 19.7 bcf/day (+0.9% w/w), according to BNEF.

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.

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, 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. 

As a negative factor for gas prices, the Edison Electric Institute last Wednesday reported that US (lower-48) electricity output in the week ended June 20 fell -2.17% y/y to 89,351 GWh (gigawatt hours).  However, US electricity output in the 52 weeks ending June 10 rose +2.45% y/y to 4,347,841 GWh.

Last Thursday’s weekly EIA report was bearish for nat-gas prices, as nat-gas inventories for the week ended June 19 rose by +76 bcf, above expectations of +69 bcf and above the 5-year weekly average of +75 bcf.  As of June 19, nat-gas inventories were down -2.2% y/y, and +5.7% above their 5-year seasonal average, signaling adequate nat-gas supplies.  As of June 28, gas storage in Europe was 49% full, compared to the 5-year seasonal average of 63% full for this time of year.

Baker Hughes reported last Friday that the number of active US nat-gas drilling rigs in the week ending June 26 rose by +3 to 125 rigs, moderately below the 2.5-year high of 134 rigs set in February 2026.