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US Natural Gas Update: Hotter Weather Forecasts Counter Bearish Inventory Data

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US natural gas futures maintained gains in after-hours trading on Thursday as forecasts pointed to above-average temperatures across much of the country next week, despite a larger-than-expected inventory build.

The front-month Henry Hub contract and the continuous contract rose 2.70% to $3.308 per million British thermal units.

On its second-to-last day as the front-month, July natural gas futures rose 12.2 cents, or 3.8%, to settle at $3.343/MMBtu, their highest close since Feb. 6, according to Reuters.

Barchart said prices were sharply higher on expectations of hotter US weather, which could increase natural gas demand from electricity generators for air conditioning.

Citing data from The Commodity Weather Group, it said above-average temperatures are expected across the Midwest and Northeast from June 30 to July 4.

Earlier on Thursday, the US Energy Information Administration reported natural gas inventories rose by 76 billion cubic feet to 2,835 Bcf in the week ended June 19, topping expectations for a 67 Bcf to 73 Bcf build.

Stocks are 49 Bcf below year-ago levels but 152 Bcf above the five-year average of 2,683 Bcf, according to EIA data. The injection briefly pressured prices, with futures sliding to an intraday low of $3.196/MMBtu before recovering.

Gelber & Associates said the market is balancing stronger late-June and early-July heat against elevated storage levels. "A +76 Bcf build isn't bearish enough on its own to derail prices, but it keeps the front end tightly tied to weather confirmation," the analysts said.

On the supply side, Barchart, citing BNEF data, said US Lower 48 dry natural gas production was a robust 112 Bcf per day, up 3.4% over the year.

Lower-48 natural gas demand was 72.9 Bcf/d, down 10.5% over the year. Of that, Celsius Energy put Wednesday's power burn at 37.7 Bcf, up 1.3 Bcf from the day before, but down 6.1% from a year ago.

In the export sector, estimated LNG flows to US export terminals were 19.1 Bcf/d, up 0.8% from the previous week, mostly recovering from spring maintenance slowdowns.

Meanwhile, FERC approved commissioning activities for Golden Pass LNG's second liquefaction train, keeping the project on track for a Q4 2026 startup.

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