Natural Gas News: Natural Gas Futures Eye EIA Report as Heat Builds

Heat and Storage Drive July Natural Gas Higher

July Nymex Natural Gas gained nearly 1.5% on Wednesday and pushed higher again in early Thursday trading. The Energy Information Administration storage report drops today. Analysts expect a 99 billion cubic feet build. The five-year average for this week is 101 bcf. Last week came in at 92 bcf against expectations of 96 bcf. Two straight weeks running below the seasonal pace heading into summer. Commodity Weather Group shifted models warmer on Wednesday with above-normal temperatures expected through at least June 12 across the Mid-Atlantic, Midwest, and Interior West. Storage coming in light and heat building at the same time is what has buyers showing up.

Storage Injections Keep Missing the Mark

The Energy Information Administration reported a 92 bcf build last week. The Street was looking for 96 bcf. The five-year average was 97 bcf. Today’s number is expected at 99 bcf against a 101 bcf average. Two consecutive weeks below the seasonal pace during injection season. Total inventories are still 6.2% above the five-year average and slightly above year-ago levels so there is no shortage right now. But the builds keep coming in lighter than they should and the market is watching the direction, not the total. If injections continue to undershoot the seasonal average while cooling demand is just getting started, the cushion that is there right now gets thinner faster than the bears expect.

Warmer Forecasts Lift Power Demand

Commodity Weather Group shifted models warmer on Wednesday. Above-normal temperatures are expected across the Mid-Atlantic, Midwest, and Interior West through at least June 12. The Edison Electric Institute reported U.S. electricity generation for the week ending May 30 climbed 6.4% from a year earlier. Over the past 52 weeks power generation is running 2.18% above year-ago levels. The grid is already pulling harder on natural gas and the real summer heat has not arrived yet. Summer driving season is just starting. If temperatures hold above normal through June and the builds keep trailing the seasonal average, the demand side of this trade gets louder.

Qatar Damage Keeps Global LNG Market Tight

Qatar’s Ras Laffan Industrial City took damage earlier this year and roughly 17% of export capacity at the world’s largest LNG facility is still offline. Ras Laffan handles about 20% of global LNG supply. The Strait of Hormuz is still restricted on top of it. Both disruptions are pulling more demand toward U.S. cargoes and that is not changing anytime soon.

Is Production Enough to Cap the Rally?

U.S. dry gas production hit 109.6 bcf per day on Wednesday. That is up 3.2% from a year ago and running near record levels. The Energy Information Administration raised its 2026 production forecast to 110.61 bcf per day. Baker Hughes reported the rig count held steady at 125 last week. That is below February’s 2.5-year high of 134 rigs but well above the 94-rig low from September 2024. The gas is there. Production is not the problem. The question is whether below-average storage builds, rising power demand, and the global LNG pull are enough to absorb it. Right now the market is saying yes.

Daily July Natural Gas Futures Technical Analysis

July Natural Gas futures are edging higher shortly before the full Nymex opening on Thursday. The market is currently straddling a minor pivot at $3.248 that should set the tone for the day.

The main trend is up according to the daily swing chart. A trade through $3.396 will signal a resumption of the uptrend. The main trend will change to down when sellers take out the last swing bottom at $2.978.

The short-term range is $2.893 to $3.396. Its 50% level at $3.145 is support. This level was successfully tested earlier in the week and remains a critical pivot.

Minor swings at $2.978 to $3.396 and $3.396 to $3.099 have created additional pivots at $3.187 and $3.248, respectively.

The intermediate range is $3.881 to $2.893. Its 50% level at $3.387 is the first upside target. It was tested on June 1 when the market topped at $3.396. The longer-term range mid-point is $3.642.

Currently, the 50-day moving average at $3.130 is providing support. It forms a support cluster with a minor pivot at $3.145. It was successfully tested on Tuesday when the market first dropped to $3.099 then recovered this level into the close.

The 200-day moving average at $3.621 is resistance. It creates a resistance cluster with the long-term pivot at $3.642.

Trader reaction to the pivot at $3.248 will determine whether the bulls or the bears are in control. A sustained move over $3.248 will signal the presence of buyers. If this creates enough upside momentum then look for a possible retest of $3.387 to $3.396. A near-term breakout over $3.396 will put $3.621 to $3.642 on the radar.

A sustained move under $3.248 will indicate the presence of sellers. This could create a labored break with support ranging from $3.187 to $3.131. Crossing to the weak side of the 50-day MA will indicate increasing selling pressure with $3.099 the next target. This is another potential trigger point for an acceleration to the downside.

What to Watch

Today’s Energy Information Administration report is the immediate catalyst. A build below 99 bcf extends the streak of below-average injections and keeps the bid under July Nymex Natural Gas. Heat forecasts running above normal through mid-June support the demand side. Qatar’s Ras Laffan damage keeps global LNG supply tight and U.S. export demand elevated. Production near 109.6 bcf per day is the bearish offset but the market is not trading supply growth right now. It is trading the builds and the weather. That does not change unless injections start surprising to the upside or the heat forecasts break.

The pivot at $3.248 sets the tone for Thursday. A sustained move above it targets the $3.387 to $3.396 resistance zone and a breakout above $3.396 puts the 200-day moving average at $3.621 and the long-term pivot at $3.642 on the radar. Below $3.248 support layers down from $3.187 to the 50-day moving average at $3.130. Tuesday’s recovery off $3.099 showed buyers are still defending that area.

More Information in our Economic Calendar.