HomeNewsU.S. natgas prices climb 2% to 2-week high on lower output, higher demand forecasts

U.S. natgas prices climb 2% to 2-week high on lower output, higher demand forecasts

5/28/2025
  • S. LNG export feedgas hit record high in April
  • S. gas output hit record high in April
  • S. gas storage about 4% over five-year normal

U.S. natural gas futures climbed about 2% to a two-week high on Wednesday on a drop in output, forecasts for more demand next week than previously expected and an outlook calling for hotter-than-normal weather this summer that should boost the amount of gas power generators burn to keep air conditioners humming.

On its last day as the front-month, gas futures for June delivery on the New York Mercantile Exchange rose 6.1 cents, or 1.8%, to $3.459 per million British thermal units (MMBtu), putting the contract on track for its highest close since May 14.

Futures for July, which will soon be the front-month, were up about 0.4% to $3.76 per MMBtu.

Next-day prices at the U.S. Henry Hub benchmark in Louisiana were trading around $3.20 per MMBtu. Low next-day Henry Hub prices have kept pressure on futures in recent weeks with spot contracts trading below front-month futures every day since late April.

Analysts have said that so long as spot prices remain far enough below front-month futures to cover margin and storage costs, traders should be able to lock in arbitrage profits by buying spot gas, storing it and selling a futures contract.

With higher-than-usual cooling demand offsetting lower-than-usual heating demand last week, analysts projected energy firms added near-normal amounts of gas into storage during the week ended May 23 after injecting more gas than normal during the prior five weeks.

Gas stockpiles were currently around 4% above the five-year (2020–2024) average.

Supply and demand. Financial firm LSEG said average gas output in the Lower 48 U.S. states fell to 105.0 Bft3d so far in May, down from a monthly record of 105.8 Bft3d in April.

On a daily basis, however, output was on track to drop to a preliminary two-month low of 103.7 Bft3d on Wednesday, down from 105.4 Bft3d on Tuesday. Analysts have said preliminary data is often revised later in the day.

Energy traders said output reductions so far this month were primarily due to normal spring maintenance on gas pipes, including U.S. energy firm Kinder Morgan's 2.7-Bft3d Permian Highway from the Permian Basin in West Texas to the Texas Gulf Coast. Kinder Morgan said it exchanged a turbine at the Big Lake compressor station from May 13–26.

Energy firms usually work on gas pipes when demand is low in the spring and autumn.

Meteorologists projected weather across the Lower 48 states would remain mostly warmer than normal through June 12.

LSEG forecast average gas demand in the Lower 48, including exports, will slide from 96.1 Bft3d this week to 95.7 Bft3d next week. The forecast for this week was lower than LSEG's outlook on Tuesday, while its forecast for next week was higher.

The average amount of gas flowing to the eight big LNG export plants operating in the U.S. fell to 15.1 Bft3d so far in May, down from a monthly record of 16.0 Bft3d in April.

The LNG feedgas decline this month was mostly due to maintenance at Cameron LNG's 2.0-Bft3d plant in Louisiana, Cheniere Energy's 3.9-Bft3d Corpus Christi under construction and in operation in Texas and Cheniere's 4.5-Bft3d Sabine Pass in Louisiana, and a few brief unplanned reductions at Freeport LNG's 2.1-Bft3d plant in Texas.

Looking ahead, energy traders said they expect LNG feedgas to remain below April's record high in June with Cheniere planning about three weeks of maintenance on a couple of liquefaction trains at Sabine around June 2–23.

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