U.S. natural gas storage actual: 23 vs 46 previous; est 28

U.S. natural gas storage actual: 23 vs 46 previous; est 28

The U.S. natural gas storage levels have shown a significant disparity this week, with actual storage at 23 Bcf compared to the previous week's 46 Bcf. Estimates suggest a rise to 28 Bcf for the upcoming week. This fluctuation is attributed to a combination of factors, including weather patterns and market dynamics.

The Energy Information Administration (EIA) reports that the Henry Hub spot price increased by 35 cents to $3.43/MMBtu, while Henry Hub futures price rose by 34 cents to $3.551/MMBtu. These increases are partly due to higher demand for natural gas in the Northeast, driven by hot and humid weather conditions [1].

On the supply side, total U.S. natural gas consumption rose by 2.5% week over week, with power generation consumption increasing by 4.2%. Meanwhile, natural gas exports to Mexico decreased by 1.5%, indicating a shift in demand patterns [1].

Liquefied Natural Gas (LNG) exports have also been a significant factor, with 30 LNG vessels departing U.S. ports between July 10 and July 16, carrying a combined capacity of 114 Bcf [1].

The storage levels are expected to continue to rise, with projections indicating a mid-July increase of 33 Bcf. This trend is supported by positive momentum in injection rates and the current supply and demand conditions. However, weather and seasonal phenomena in the second half of summer and early fall remain a limiting factor [2].

The forward curve for natural gas contracts continues to show significant distortions, with winter 2026–27 contracts remaining above the upper quartile, indicating persistent long-term risk pricing. Despite some normalization in 3-year forward pricing, the curve still exhibits pronounced skew in the nearest and most distant delivery segments [2].

In conclusion, the U.S. natural gas market is experiencing a complex interplay of factors that are influencing storage levels and market prices. While the immediate outlook suggests a continued rise in storage, the long-term pricing dynamics remain a subject of interest for investors and financial professionals.

References:
[1] https://www.eia.gov/naturalgas/weekly/
[2] https://www.benzinga.com/markets/commodities/25/07/46601889/natural-gas-market-outlook-stable-surface-structural-strain