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US Natural Gas Update: Futures Fall on Larger Inventory Build

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US natural gas futures fell as of midday on Thursday after US government data showed a larger-than-expected increase in storage inventories.

The front-month Henry Hub contract and the continuous contract both fell 1.19% to $2.656 per million British thermal units.

The US Energy Information Administration reported that working gas in storage increased by 33 billion cubic feet in the week ended July 31, exceeding analysts' expectations for a 27-31 Bcf injection.

Total inventories rose to 3,117 Bcf, down 12 Bcf from the same period a year earlier but 195 Bcf above the five-year average of 2,922 Bcf. Storage levels remain within the historical range, according to the EIA.

Pinebrook Energy Advisors said in a note that inventories continue to widen their surplus over the five-year average, which increased by 22 Bcf during the reporting week.

Storage injections have outpaced the benchmark in six of the past seven weeks, with inventory growth exceeding seasonal norms by about 1.2 Bcf per day since the start of the injection season. The 195 Bcf surplus is the widest since August 2025, they said.

On the supply side, Gelber & Associates said US dry gas production is running at a strong 110.4 Bcf/d, while Canadian imports are averaging 5.2 Bcf/d, keeping total supply near 115.6 Bcf/d.

Demand fundamentals remain supportive, with power-sector consumption holding at 48.8 Bcf/d and LNG feedgas demand reaching 18.6 Bcf/d, Gelber & Associates said.

The firm added that current supply-demand balances remain relatively supportive in the near term, although cooling demand is expected to ease as temperatures trend closer to seasonal norms later this month.

In the meantime, NatGasWeather.com said most of the US is expected to experience hot to very hot conditions over the next seven days, with highs ranging from the upper 80s to 110 degrees Fahrenheit under strong high pressure.

The exception will be the northern Plains, where weather systems are expected to keep temperatures in the 70s and 80s degrees Fahrenheit. Overall, the forecaster expects very strong natural gas demand over the next week.

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