US Nat-Gas Prices Tumble Amid Cooler Temps and Rising Production

US natural gas prices declined by 6.73% to a one-week low on cooler temperature forecasts and an increase in gas production. Forecaster Vaisala shifted forecasts to cooler in the West for July 26-30, while Baker Hughes reported a rise in US natural gas drilling rigs to a 17-month high of 117 rigs.

US natural gas prices have experienced a significant decline, falling by 6.73% to a one-week low. This drop is attributed to cooler temperature forecasts and an increase in gas production. Forecaster Vaisala has shifted its predictions to cooler temperatures in the West for the period July 26-30, while Baker Hughes reported a rise in US natural gas drilling rigs to a 17-month high of 117 rigs.

The Henry Hub spot price, a benchmark for US natural gas, rose 35 cents from $3.08 per million British thermal units (MMBtu) last Wednesday to $3.43/MMBtu yesterday [1]. However, the August 2025 NYMEX contract price increased by 34 cents, from $3.214/MMBtu to $3.551/MMBtu [1]. Despite these increases, regional spot prices varied widely, with some western hubs seeing decreases and others experiencing significant increases, particularly in the Northeast [1].

The Northeast region, in particular, saw substantial price fluctuations due to hot and humid weather conditions. Prices at Algonquin Citygate, a natural gas benchmark price covering Boston-area consumers, rose by $6.81/MMBtu from $2.93/MMBtu last Wednesday to $9.74/MMBtu yesterday, reaching a high of $13.25/MMBtu on Tuesday, July 15 [1]. Similarly, prices at Transco Zone 6 New York rose by $0.72/MMBtu from $2.78/MMBtu last Wednesday to $3.50/MMBtu yesterday [1]. The region had 356 cooling degree days (CDDs), 80 more CDDs than normal and 18 CDDs more than the previous week, leading to a 2.7% increase in natural gas consumption for power generation [1].

International natural gas futures prices also showed mixed changes, with weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia decreasing by 15 cents to a weekly average of $12.97/MMBtu [1]. Meanwhile, natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands increased by 32 cents to a weekly average of $12.00/MMBtu [1].

The supply side of the market saw an increase in total natural gas supply by 0.5% (0.5 Bcf/d) compared to the previous report week, with dry natural gas production growing by 0.2% (0.3 Bcf/d) and average net imports from Canada increasing by 4.4% (0.3 Bcf/d) [1]. Total U.S. consumption of natural gas rose by 2.5% (1.9 Bcf/d), with natural gas consumed for power generation increasing by 4.2% (1.8 Bcf/d) and consumption in the residential and commercial sector increasing by 1.2% (0.1 Bcf/d) [1].

The U.S. natural gas market experienced a significant price drop due to a combination of record output levels, lower demand forecasts, and cooler weather expectations [2]. The front-month gas futures for August delivery on the New York Mercantile Exchange (NYMEX) fell by 21.1 cents, or 5.9%, to $3.354 per million British thermal units (mmBtu) [2]. The March-April spread, often used to bet on winter weather forecasts and supply and demand, fell to its lowest level since March 2020 [2].

Natural gas producers and related stocks, such as EQT Corporation and Expand Energy, were among the S&P 500 losers, as their stock prices fell in response to the lower futures prices [2]. The U.S. natural gas supply and demand dynamics played a crucial role in the price movement, with average gas output in the Lower 48 states rising to a record high of 107.2 billion cubic feet per day (bcfd) in July, up from a monthly record high of 106.4 bcfd in June [2].

Venture Global signed a deal with Italian company Eni to sell 2 million metric tons of liquefied natural gas per year for 20 years, signaling a growing demand for US LNG exports [3]. This deal comes as President Donald Trump pressures Europe to import more from the United States to avoid tariffs.

References:
[1] https://www.eia.gov/naturalgas/weekly/
[2] https://www.ainvest.com/news/natural-gas-producers-transporters-decline-cooler-forecasts-high-production-2507/
[3] https://www.upi.com/Top_News/US/2025/07/16/eni-venture-global-natural-gas-deal/2891752676049/