U.S. natural gas futures tumbled on Thursday, slipping over 6% to their lowest levels since mid-May, as stronger-than-expected storage injections and growing output offset even record-setting heat across the Northeast.
Storage Data Surprises to the Downside
On its final day of trading, July natural gas futures fell by 6.1%, settling at $3.199 per mmBtu—marking the lowest close since May 19 and extending the losing streak to five consecutive sessions, the longest since August 2024.
August contracts, soon to become the new front-month, also dropped by around 4% to $3.43 per mmBtu.
The latest natural gas price recorded a drop of -4.26% to $3.261.
The sharp pullback followed the latest EIA storage report, which showed a 96 billion cubic feet (bcf) build for the week ending June 20—outpacing analyst estimates of 88 bcf, and far exceeding both last year's 59 bcf build and the five-year average of 79 bcf.
“Supply is consistently outpacing demand, and traders are responding accordingly,” said Sarah Linton of CapitalEdge Analytics.
Heat Fails to Lift Prices as Production Climbs
Even with record heat waves pushing temperatures to 100°F (37.8°C) in cities like New York, Boston, and Philadelphia, and electricity demand surging due to increased air conditioning use, the price support typically seen during such weather events has faltered.
Analysts attribute this to robust production levels, which are helping replenish gas inventories faster than usual.
“We’re seeing solid power demand, but output is simply too high,” said Tom Baker, a commodities expert at RigWatch. “Storage continues to build, which keeps a lid on prices.”
Analysts Say Summer Highs May Be Behind Us
Natural gas prices have now retreated by 23% since peaking at $4.15/mmBtu on June 20, suggesting the market may have already passed its seasonal high.
“Unless the U.S. faces an extended, nationwide heatwave, it’s likely that June 20 marked the high point for the summer,” Linton added.
With August and July futures continuing to trade at a discount to recent levels, the market appears braced for a muted second half of summer, despite ongoing heat and demand for cooling.
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