Natural gas futures settled at $3.18/mmBtu on NYMEX, down 2.12%, as updated weather models showed below-normal temperatures across the eastern US for the next two weeks, reducing cooling demand. The decline erased gains from earlier in the week.
The EIA reported a storage injection of 79 Bcf for the week ending June 19, above both the 72 Bcf consensus estimate and the five-year average of 65 Bcf. Total US gas storage now stands at 2,856 Bcf, 18.5% above the five-year average.
Power sector demand has been below expectations, with gas-burn averaging 34 Bcf/day for the past week, down from 37 Bcf/day in mid-June. The mild weather pattern has reduced the need for gas-fired power generation, as renewables and coal plants meet the lower cooling demand.
Production remains robust at 103.2 Bcf/day, as associated gas from Permian Basin oil drilling continues to grow. The Permian alone accounts for 22 Bcf/day of associated gas production, much of which must flow to market regardless of gas prices.
The forward curve shows modest backwardation, with Q3 2026 averaging $3.10/mmBtu and Q4 2026 at $3.45/mmBtu, reflecting the winter heating premium. The current spot price of $3.18 sits near the middle of the recent range.
Mild weather and robust storage builds create near-term price weakness. Buyers with winter 2026–2027 requirements should monitor the $3.00–$3.10 zone as a potential entry point. The winter premium in Q4 forward pricing reflects elevated LNG export demand.