Market expectations for consistent East Coast temperatures in the 80s-100s have turned toward a mix of showers and 70s-80s, undercutting peak summer demand in key urban corridors that typically drive July natural gas consumption. The cooler pattern has removed immediate weather-based upside catalysts while leaving futures vulnerable to additional selling.
Is the Supply-Demand Imbalance Capping Prices
Lower-48 dry gas production remains firm at 107.4 Bcf/d, up 3.7% year-on-year, even as rigs decline from 114 to 109, underlining operational efficiency across basins. Meanwhile, demand remains soft, ranging from 74.0 to 76.7 Bcf/d, sustaining a persistent daily surplus exceeding 30 Bcf/d that pressures both cash and futures pricing structures.
Recent EIA storage data confirmed this imbalance, with injections of +96 Bcf and +55 Bcf in consecutive weeks, both surpassing expectations and leaving inventories 6.2% above the five-year seasonal average. Without an aggressive cooling demand spike or a supply disruption, this storage cushion limits the potential for sharp price rebounds.
Are LNG Exports Enough to Absorb Surplus
LNG feed gas flows remain supportive at 14.7–15.8 Bcf/d, with recent weekly growth rates of 6.8% to 9.3% in periods, but these gains remain insufficient to absorb the structural supply overhang. Easing geopolitical tensions, including signals of an Israel-Iran ceasefire, have further reduced geopolitical risk premiums that could otherwise tighten export-driven support for futures.
