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US Natural Gas Update: Futures Slip on Record Production, Soft Demand

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US natural gas futures prices declined as of midday trade on near-record domestic production, softer liquefied natural gas export demand and mixed regional weather forecasts.

The front-month futures contract and the continuous contract each fell 0.76% to $2.737 per million British thermal units.

The decline came despite a smaller-than-expected storage build reported by the US Energy Information Administration on Thursday, as market attention shifted toward ample supply and subdued demand.

The EIA reported that US natural gas inventories increased by 28 billion cubic feet, below analysts' expectations of around 35 Bcf, according to Trading Economics.

The latest weekly data showed inventories were over 6% above the five-year average, signaling continued supply abundance.

Production remained strong, with output in the Lower 48 states averaging 110.6 Bcf per day in July, matching the record monthly high set in December 2025, Trading Economics said.

NRG Energy said Friday that production stood at 108.8 Bcf/d, up 0.2 Bcf/d from the previous Friday.

On the demand side, LNG feedgas flows eased slightly, averaging 17.2 Bcf/d at major export terminals, compared with 17.4 Bcf/d in June. The decline was partly attributed to scheduled maintenance at Freeport LNG's Texas facility.

Weather forecasts also offered mixed signals for natural gas demand. California and the Southwest are experiencing a heat wave expected to persist through the first week of August, NRG said, while the eastern US is largely forecast to see seasonally average temperatures over the next several weeks.

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