US Natural Gas Prices Surge Amid Hot Weather Forecasts

Nat-gas prices soared on Monday, with August Nymex natural gas closing up 4.59% as hotter US weather forecasts boosted demand from electricity providers to power increased air-conditioning usage. Lower-48 state dry gas production rose 3.0% y/y, while lower-48 state gas demand fell 4.8% y/y. Estimated LNG net flows to US LNG export terminals increased 5.8% w/w.

Natural gas prices surged on Monday, with the August Nymex natural gas (NGQ25) closing up by 4.59%, marking a one-week high. The rally was driven by hotter-than-expected weather forecasts across the United States, which boosted demand from electricity providers to power increased air-conditioning usage. According to the U.S. Energy Information Administration (EIA), lower-48 state dry gas production rose by 3.0% year-over-year (y/y), while lower-48 state gas demand fell by 4.8% y/y. Additionally, estimated LNG net flows to U.S. LNG export terminals increased by 5.8% week-over-week (w/w) [1].

The August contract on NG=F recaptured its 200-day moving average, with strong upside momentum lifting prices to a six-day high at $3.50. The rally was also supported by strong LNG export demand and technical strength building toward the $3.57–$3.75 resistance cluster. Notably, higher lows were established at $3.15 and $3.38, indicating a shift to bullish control over near-term price action [1].

The extreme summer weather has led to a surge in electricity demand, particularly in the Southern and Eastern U.S. Meteorological updates from Atmospheric G2 forecast increased heat across these regions between July 19–28, adding pressure on utilities to ramp up air conditioning usage. This has already translated into higher gas-fired electricity output. The Edison Electric Institute reported total Lower-48 electricity generation at 93,747 GWh for the week ended July 5, marking a 1.0% y/y rise, with a 52-week output trend of +2.4% y/y [1].

LNG feedgas deliveries spiked to a three-month high of 16.6 Bcfd, with the Venture Global Plaquemines facility in Louisiana alone accounting for 2.9 Bcfd, per LSEG data. This marked a sharp recovery from June’s lower output as liquefaction units exit maintenance. While April’s peak was 16 Bcfd, the current rebound shows restored export flow strength, primarily heading toward Europe and potentially to Asia if spreads widen. Feedgas flow trends now provide a tailwind to U.S. benchmark pricing [1].

Despite the bullish price momentum, inventory builds continue. The latest EIA report showed +53 Bcf injection, under consensus estimates of +61 Bcf, but exactly at the five-year average. Inventories are 6.1% above the five-year norm and down 6.0% y/y, signaling adequate supply coverage but not oversaturation. LSEG data show production in July averaging 106.8 Bcfd, a new monthly record, up from 106.4 Bcfd in June. On July 14, Lower-48 dry gas output was 107.2 Bcfd, a 3.0% y/y increase [1].

Spain has emerged as a European LNG redistribution hub as Germany lags. European gas storage data show a critical imbalance, with Germany at 52% capacity, compared to Spain’s 70%. If Asian demand rises or Algerian flows decline, Spanish capacity could price higher [1].

The article concludes by noting that while natural gas storage remains high by historical norms, the current surge in LNG exports, extreme summer weather, recovering technicals, and global imbalance between Europe and Asia create a supportive backdrop. As long as NG=F holds above the $3.15–$3.38 support zone and continues to attract bullish flow near the 200-day MA, momentum favors additional upside. The next bullish confirmation comes on a daily close above $3.57. Risk remains tied to sudden shifts in weather, LNG maintenance outages, or unexpected storage gluts. But barring those, NG=F is structurally firm with potential upside toward $4.00 through Q3 2025 [1].

References:
[1] TradingNews. (2025). Hot Weather, LNG Demand, and Technical Breakouts Accelerate Natural Gas (NG=F) Price Action. Retrieved from https://www.tradingnews.com/news/natrural-gas-ng-f-rebounds-to-3-50-usd-as-lng-exports-surge-and-heatwave-fuel-bullish-breakout