Weekend revisions to temperature forecasts showed prolonged intense heat across Texas and the Southeast. The Northeast and Midwest are expected to see temperatures normalize in the coming days, but lingering heat across the southern tier of the country should help support natural gas demand from power generators deep into August. Expectations for stronger consumption in the coming weeks, along with a recovery in LNG feedgas demand, have helped offset an uptick in domestic production and lift prices from recent lows.

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Forecasts continue to show a final stretch of intense summer heat over the next several days, but the market remains focused on the milder pattern expected beyond that window and a healthy storage outlook. Inventories have increasingly separated from the five-year average, easing concerns about supply adequacy heading into the shoulder season and limiting the market’s response to near-term heat.

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Today’s EIA report showed a 33-Bcf injection into underground inventories, exceeding the five-year average build of 22 Bcf. Storage growth has now outpaced the seasonal benchmark in six of the past seven weeks, pushing the surplus to the five-year average to 195 Bcf, its widest since August 2025. Beyond the brief heat wave expected over the next five days, temperature forecasts are largely unsupportive as the market begins looking past peak summer against a backdrop of healthy storage inventories.

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Attention now turns to Thursday’s storage report, with the latest Wall Street Journal survey calling for a 31-Bcf injection for the week ended July 31. That would be only modestly stronger than the previous week’s build, as hot weather supported power-sector demand despite strong production and limited LNG exports. Even so, the projected build would exceed the 23-Bcf five-year average, expanding the surplus to 193 Bcf while narrowing the deficit to last year to 14 Bcf.

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The primary catalyst was a milder revision to the weather outlook. A period of very hot weather is still expected this weekend and into early next week, supporting elevated cooling demand in the near term. However, forecasts softened considerably across the Midwest and East beyond that window, reducing expectations for sustained heat through the middle of August and weighing most heavily on nearby contracts.

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Widespread warmer-than-normal temperatures are expected throughout the two-week period. The hottest weather on a population-weighted basis is anticipated late this week and over the weekend. Given the timing of the heat wave and forecasts showing moderating temperature anomalies beginning next week, the upcoming weekend will likely be the warmest of the balance of the season on a population-weighted basis.

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There were no major shifts in the weather outlook or broader fundamentals to drive the market. Despite widespread heat, traders remain comfortable with storage inventories and softer LNG export demand, leaving prices in consolidation mode after the sharp losses earlier in the week.

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Today’s 28-Bcf storage build was the smallest of the season and reflected the tighter balance created by ongoing heat and elevated power-sector demand. Still, the market continues to shrug off supportive weather, with strong production and reduced LNG feedgas flows helping to keep prices under pressure. With no major change in the forecast or underlying fundamentals, the near-term outlook remains largely unchanged.

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Weather forecasts remain hot, particularly across Texas and the western U.S., but the market continues to show limited concern about elevated cooling demand. Attention now turns to Thursday’s storage report, where analysts expect a 38-Bcf injection for the week ended July 24. That would exceed the five-year average build of 26 Bcf and widen the storage surplus to 195 Bcf. Strong production and reduced LNG feedgas demand appear to be offsetting heavy power-sector gas burn, reinforcing the market’s view that supplies remain comfortable despite persistent summer heat.

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The latest forecasts continue to show plenty of heat, but the market has largely shrugged off the supportive demand outlook. Reduced LNG feedgas demand appears to be adding pressure, with export volumes falling even below already-soft recent levels. Some of that weakness could be tied to Gulf Coast heat affecting terminal operations. Regardless of the cause, the loss of export demand is giving the market further reason to remain comfortable in the face of rising power burn.

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Weather forecasts shifted a bit cooler over the weekend, adding some pressure to nearby futures, although there were no major changes to the broader outlook. Strong summer demand remains in place, particularly across Texas and the West, but the market continues to show little concern about the current balance. With August now trading to new lows, the near-term price trend now appears to be pointed lower.

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The broader picture remains largely unchanged heading into the weekend. Stronger summer demand and tighter storage injections have helped establish some support, but the front of the curve has still struggled to generate a sustained move higher. For now, the front of the curve continues to look comfortable trading below $3.00, even as firmer winter pricing suggests somewhat greater concern further into the future.

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Today’s storage report showed a 32-Bcf injection, the smallest build since the beginning of the injection season. The data implies that market fundamentals tightened by nearly 1.5 Bcf per day from the previous week as warmer temperatures and weaker wind generation increased demand from natural gas-fired power generators. Reduced LNG feedgas demand and marginally higher production provided some offset, but the balance should tighten further as persistent heat in Texas continues to support elevated power-sector consumption.

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More persistent heat in Texas and stronger natural gas demand from power generators appear to be combining to provide support. The Wall Street Journal survey points to a 34-Bcf injection for the week ended July 17, down from 41 Bcf the previous week, although still slightly above the five-year average of 30 Bcf. Even so, sustained heat and firmer power-sector consumption have helped the market regain some footing ahead of Thursday’s storage report.

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Weather forecasts were also mostly unchanged, giving the market little fresh fundamental direction. Near-term heat remains insufficient to materially alter expectations for natural gas-fired generation, while the broader outlook continues to favor generally manageable summer demand. With mixed fundamentals and rangebound trading, the path of least resistance again looks to be sideways for natural gas futures.

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The market remains weighed down by mild weather expectations following last week’s brief heat, with forecasts showing generally cooler conditions returning across much of the East. Traders are also monitoring a tropical disturbance in the Gulf, which could disrupt LNG exports and reduce power generation demand along the coast. While there is always risk to offshore production, the current system appears unlikely to cause a significant interruption to Gulf supply. With no sustained heat visible in the forecast, prices may struggle to regain meaningful ground in the near term.

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The fundamental picture remains relatively comfortable despite periods of intense summer heat. Recent storage data has shown that the market is maintaining healthy inventory growth, with weaker-than-expected gas-fired generation so far this season. With production remaining strong, Freeport LNG maintenance reducing feedgas demand and sustained heat still absent from the longer-range forecast, the market continues to lack a clear bullish catalyst for a rebound.

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The selloff came despite a storage report that showed a smaller injection and a meaningful week-over-week tightening in the fundamental balance. The 41-Bcf build was roughly in line with expectations but lighter than historical benchmarks, narrowing the surplus to the five-year average and widening the deficit to last year. The implied tightening was largely driven by stronger natural gas-fired generation as wind output dropped sharply during the report week, offsetting the impact of generally milder temperatures. Even so, the market appears more focused on the lack of sustained heat in the forecast, relative weakness in power generation demand, and the broader expectation that inventories will remain comfortable through the balance of the injection season.

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Attention now turns to tomorrow’s storage report, with the Wall Street Journal survey pointing to a 44-Bcf injection for the week ended July 10. That would be nearly in line with the five-year average build of 45 Bcf, leaving the surplus largely unchanged at 184 Bcf. Although weather was relatively mild during the report week, wind generation output fell sharply, increasing the need for gas-fired power and likely contributing to a lighter build than the week prior. Analyst estimates range from 33 Bcf to 52 Bcf, while inventories are expected to remain 18 Bcf below year-ago levels.

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Tomorrow could be the hottest day of the summer so far on a population-weighted basis. Peak load in PJM is currently forecast to reach 164 GW, which would approach all-time record levels. During the previous heat wave in June, power generation demand for natural gas came in lower than expected due to strong wind output in the Midwest and Texas. Recent summers have featured several days when generation demand spiked above 50 Bcf per day, but that threshold has not yet been crossed this season. If gas demand again disappoints amid extreme heat in the coming days, it could prompt the market to further reassess seasonal fundamental risk.

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