Natural gas prices fell sharply this week despite the hottest temperatures of the season, with the prompt contract nearing key support around $3/MMBtu and forward curves broadly retreating from early summer highs. Power burn briefly outpaced 2024 levels amid extreme heat in Texas, but overall summer demand remains well behind last year, thanks to higher gas prices, stronger coal and renewable output, and cooler weather forecasts across the Midwest and East. The latest EIA storage build of 23 Bcf—the smallest of the summer—helped narrow the year-on-year deficit further, and inventories remain on track to finish the season near 4 Tcf. LNG exports are strong but slightly below recent highs, and production continues to hold above 105 Bcf per day without meaningful growth. All eyes now turn to whether next week’s heat spike will shift the market’s outlook or simply mark the seasonal peak.
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