Natural gas futures edged higher on June 25 as the EIA's weekly storage report showed a smaller-than-expected injection. The 68 Bcf build was the lowest for late June in three years. Production remained steady at 102.3 Bcf/d, and LNG feedgas demand was flat at 13.8 Bcf/d.
Total natural gas in storage now stands at 2,680 Bcf, which is 287 Bcf above the five-year average of 2,393 Bcf and 312 Bcf above last year's level. The storage surplus to the five-year average has narrowed from 18% in early May to 12% now, as higher power sector demand has balanced the market more quickly than expected.
Power sector demand for natural gas rose to 42.1 Bcf/d this week, up from 40.5 Bcf/d last week, as temperatures in Texas and the Midwest pushed above 95F. The National Weather Service's 8-14 day outlook shows above-normal temperatures across most of the US, supporting cooling demand.
LNG export volumes have been steady at 13.8 Bcf/d with Freeport LNG operating at 2.1 Bcf/d and Sabine Pass at 4.8 Bcf/d. No major maintenance events are scheduled for the next two weeks. LNG net flows remain strong as European and Asian buyers continue to restock ahead of winter.
The storage surplus is narrowing faster than expected due to hot weather driving power demand. Buyers should consider locking in winter strip hedges now at current levels. The 12-month strip at $3.45/mmBtu is lower than the $4.00+ spike levels seen in early 2025. A hot July-August could accelerate the balance further.