Natural Gas Prices Poised for a Late June Surge: A Long Position Play

The U.S. natural gas market is approaching a critical juncture in late June 2025, as converging factors—including the conclusion of key LNG export terminal maintenance, rising summer cooling demand, and narrowing storage buffers—are setting the stage for a price surge. Investors positioning for a move above $4/mmBtu by month-end stand to benefit from this demand-driven catalyst. Here's why the stars are aligning for a bullish breakout.

Maintenance Wrap-Up Fuels Export Growth

The prolonged maintenance at Cheniere Energy's Sabine Pass LNG terminal and the critical Creole Trail Pipeline, which began on May 31, is set to conclude by June 22. This 22-day outage, impacting up to 1.5 Bcf/d of gas supply to the terminal, has held back U.S. LNG exports. With repairs now nearing completion, Sabine Pass's 30 MTPA capacity will re-enter full service, boosting feedgas demand. Concurrently, Cameron LNG's maintenance—expected to wrap up by late June—will further unlock export capacity.

The timing is strategic: post-maintenance, terminals can capitalize on the $1.4/MMBtu premium of European TTF prices over Asian JKM benchmarks, incentivizing arbitrage trades. U.S. gas, trading at $3.557/mmBtu for July futures (vs. $12.15/mmBtu for TTF), offers a stark value gap.

Storage remains below 2024 levels but above the five-year average, leaving limited cushion for unexpected demand spikes.

Summer Cooling Demand Ignites Power Sector Burns

June's seasonal shift to hotter weather will amplify power generation needs, particularly in the eastern U.S. where cooling demand typically drives gas-fired electricity. The EIA forecasts summer power sector gas consumption to rise by 3.9% week-over-week, reversing recent dips caused by mild spring weather. This surge in demand, combined with lower-than-last-year storage levels (down 11% as of late May), will tighten supply buffers.

Arbitrage Dynamics and Global Pricing Pressures

The TTF-JKM spread widening to $1.40/MMBtu highlights Europe's desperation for LNG, a trend that will persist through summer. U.S. exporters, once back online, will prioritize higher-priced European contracts over Asian markets, further straining domestic supply. The Henry Hub-TTF spread of $8.59/MMBtu creates a powerful incentive for arbitrageurs to bid up U.S. gas prices to align with global benchmarks.

Storage and Supply Constraints Add Fuel to the Fire

While U.S. storage is projected to end the injection season at 3,670 Bcf (3% below the five-year average), the current 2,476 Bcf level leaves little room for error. Even a modest rise in demand—say, from an unexpected heatwave—could deplete reserves faster than injections can replenish them. Meanwhile, delayed LNG projects like Plaquemines and Golden Pass Phase 2 keep global supply growth constrained, limiting downward price pressure.

Investment Thesis: Go Long on Natural Gas

The combination of maintenance-driven export ramp-up, summer demand spikes, and global price arbitrage opportunities creates a bullish trifecta. Investors should consider:

1. Buying Natural Gas Futures (Henry Hub): Target prices above $4/mmBtu by month-end, with upside potential to $4.50/mmBtu if European premiums widen further.
2. Natural Gas ETFs: Funds like the United States Natural Gas Fund (UNG) track futures prices and offer direct exposure.
3. LNG Exporters: Equity plays such as Cheniere Energy (LNG) and Cameron LNG (subsidiary of Sempra Energy) benefit from higher export volumes and pricing power.

The gap between domestic prices and global benchmarks signals upside potential for U.S. gas.

Risks to the Bull Case

• Maintenance Delays: Any unforeseen setbacks at Sabine Pass or Cameron LNG could delay export growth.
• Cooler Weather: A prolonged cool spell could reduce power sector burns.
• Supply Surprises: A sudden surge in U.S. gas production or increased Canadian imports could ease demand pressure.

Conclusion: Position for a June Breakout

With maintenance ending, storage buffers thinning, and global arbitrage opportunities widening, the stage is set for a natural gas price surge. Investors who act now to secure long positions stand to capitalize on a market that's primed to close the $4/mmBtu barrier—and potentially push higher. The heat is on, and so are gas prices.