After a sharp rally last week, U.S. natural gas prices reversed hard as July expired, dragged down by softening weather forecasts beyond the first major heat wave of the summer. Despite a notable demand spike and continued strength in LNG exports, the front of the curve collapsed back into its familiar $3–$4 range. Storage builds remain healthy, with year-over-year deficits shrinking fast and a solid surplus to the five-year average. But with stagnant production, rising exports, and long-term contracts holding firm, the market’s underlying tightness hasn’t gone away. If the next round of heat proves stickier, don’t be surprised to see prices scream back toward recent highs.
