U.S. natgas prices hit 20-week high on LNG flows, heat outlook

• Prices on track to rise for two consecutive weeks for first time since December
• July–August futures spread widened to a record premium
• One U.S.-bound China cargo diverted to South Korea as trade tensions continue

U.S. natural gas futures edged up about 1% to a 20-week high on Friday, supported by increased flows to liquefied natural gas export plants and forecasts for hotter weather in coming weeks that should boost power demand for air conditioning.

On their last day as the front-month, gas futures for July delivery on the New York Mercantile Exchange rose 4.2 cents, or 1.3%, to $3.385 per million British thermal units, putting the contract on track for its highest close since February 6 for a second day in a row.

The August contract, which will soon be the front-month, gained about 1% to $3.32 per MMBtu.

That kept the premium of futures for July over August near Thursday's record high.

For the week, the front-month was up about 5% after gaining around 4% last week. It is poised to rise for two weeks in a row for the first time since December 2025.

Supply and demand. Financial group LSEG said average gas output in the U.S. Lower 48 states held at 109.7 Bft³d so far in June, the same as May. That compares with a monthly record high of 110.6 Bft³d in December 2025.

Analysts said mostly mild weather during the spring allowed energy firms to stockpile more gas than usual.

They projected the amount of gas in inventories would edge up to 5.9% above normal during the week ended June 26, up from 5.7% above in the previous week.

Meteorologists forecast the weather will remain mostly warmer than normal through July 11, which should boost the amount of gas power generators burn to keep air conditioners humming. About 40% of U.S. power generation comes from gas-fired plants.

LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 102.8 Bft³d this week to 105.5 Bft³d next week and 108.6 Bft³d in two weeks. The forecasts for this week and next were similar to LSEG's outlook on Thursday.

Average gas flows to the nine big U.S. LNG export plants rose from 17.1 Bft³d in May to 17.3 Bft³d so far in June due in part to record feedgas at QatarEnergy/ExxonMobil's Golden Pass plant in service and under construction in Texas.

That compares with a monthly record high of 18.8 Bft³d in April.

In other LNG news, one of the two LNG vessels sailing from the U.S. directly to China, the LNG Sakura, turned toward South Korea, according to LSEG data. The other vessel is expected to reach China in mid-July.

So far, no LNG tanker has left a U.S. export plant and gone directly to China during U.S. President Donald Trump's second term, which started in January 2025, due primarily to trade disputes between the world's two biggest economies.

China, which imported a large amount of U.S. gas in the past and has many contracts to buy U.S. LNG, is the world's biggest gas importer, while the U.S. is the world's biggest gas producer, consumer and exporter. Chinese companies have bought U.S. LNG and then sold it to buyers in other countries.

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