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US Natural Gas Update: Futures Price Decline Despite Heat Dome Forecasts

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US natural gas futures were down in late Friday trade as the July NYMEX Henry Hub contract expired and the August contract became the front month, with forecasts for extreme heat next week offset by comfortable supply fundamentals.

The July contract settled at $3.231 per million British thermal units at expiration, while August edged 0.24% lower to $3.287/MMBtu. The continuous Henry Hub contract fell 3.32% to $3.232/MMBtu.

According to Energy Buyers Guide, July futures dropped more than 11 cents on Friday, settling more than 20 cents below the session high after heavy selling in the final hour. Despite the late decline, the contract posted the highest expiration settlement since February, lifting the average 2026 contract expiration price to $3.863/MMBtu. July also marked the fifth consecutive contract to expire below its 2025 counterpart, though by only three cents.

Weather forecasts continued to underpin expectations of strong demand. The US National Weather Service said much of the eastern US will see temperatures in the 90s and low 100s degrees Fahrenheit next week, with heat index values reaching 105-110 degrees Fahrenheit in many areas. Overnight temperatures are also expected to remain unusually warm.

Energy Buyers Guide said power-sector gas demand should reach summer highs but noted traders remain focused on whether the heat persists beyond next week.

Supply data remained bearish. Barchart, citing BNEF, said US dry gas production rose 0.5 Bcf/d to 112.5 Bcf/d on Friday, up 4.7% from a year earlier. LNG feedgas deliveries increased 4.5% week over week to 19.1 Bcf/d as maintenance at export facilities eased.

The market also continued to digest Thursday's EIA storage report, which showed a 76 Bcf inventory build for the week ended June 19, above expectations for a 69 Bcf injection. US gas inventories were 5.7% above the five-year seasonal average, indicating supplies remain adequate despite stronger summer demand prospects.

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