Henry Hub natural gas futures for July delivery settled at $3.198/mmBtu, down 1.08% on the session. The EIA reported a 76 Bcf injection into underground storage for the week ending June 12, significantly above both the five-year average of 64 Bcf and last year's 58 Bcf.
Total working gas in storage now stands at 3,012 Bcf, which is 340 Bcf (12.7%) above last year's level and 18% above the five-year average. Storage is 72.4% full, compared to 65.1% at the same point last year. At the current injection rate, the market is heading toward record surpluses by November.
The storage overhang is a function of mild weather and strong production. US dry gas production averaged 105.2 Bcf/d in May, up 2.3 Bcf/d from May 2025. The Haynesville and Permian-associated gas continue to deliver supply growth despite low spot prices.
Cooling demand has been below normal for the Eastern US in June. National Grid's CDD (cooling degree day) data shows the Eastern half of the country has experienced 12% fewer CDDs than the 10-year average. This has suppressed power-sector gas demand during what should be the ramp-up to summer peak.
The storage surplus is significant and growing. Buyers with Q3-Q4 coverage should not rush to fix prices at current levels. The risk is skewed toward lower prices through August unless an exceptionally hot July drives cooling demand. $2.80-3.00 is a more likely Q3 range.