Natural Gas News: Storage Report Miss Lifts Sentiment—Forecast Eyes Summer Weather

Total storage now sits at 3,006 Bcf—6% above the five-year average, yet 6% below last year’s level. The smaller build signaled stronger demand, particularly in the power sector, and gave the market a short-term bullish nudge.

Traders are keeping a close eye on the refill pace. With injections running 24% above the five-year norm so far, storage could be well-stocked by late October, potentially capping upside unless summer heat persists longer than expected.

Can the Heat Dome Keep Demand Elevated?

Extreme temperatures across the eastern U.S. continued to boost cooling load. Over 125 million Americans were under heat advisories during the week, pushing power burn to unseasonably high levels. Natural gas used for electricity generation rose by 0.4 Bcf/d week-over-week, up 1.0%, according to S&P Global.

This surge in demand came just as gas-fired generation had already been running hot. The sector remains the biggest demand driver this summer, and with the heat wave showing few signs of easing, the trend is likely to persist in the near term.

Is Supply Finally Tightening?

Supply took a modest step back last week, with total gas output falling by 0.6% to 106.2 Bcf/d. Net imports from Canada also edged lower. Rig count data showed producers are holding steady, with minimal adjustments in key basins. The drop in production, while small, hints at ongoing capital discipline and could become more relevant if demand continues to surprise to the upside.

LNG Exports Bounce Back After Maintenance

LNG feedgas demand recovered last week, averaging 16.0 Bcf/d, up slightly from the week before. Gulf Coast terminals led the gains, particularly in South Louisiana, while South Texas deliveries dipped slightly. Twenty-seven LNG cargoes left U.S. ports during the week, as facilities returned to full strength following June maintenance shutdowns.