LNG and Weather Factors: We Expect Moderate Storage IncreaseThe natural gas market enters Week 31 with a sense of equilibrium, as prices hold steady and storage levels continue to climb. The expiration of Contract Q aligned with the 15-year median, while Contract U trades near the median, and 2025 fall contracts remain within the interquartile range, slightly above median levels. However, Winter 2026-27 contracts persist above the upper quartile, hinting at lingering supply and weather concerns. A projected 39 BCF storage increase for Week 30 (July 21-27) keeps inventories above the five-year median, supported by robust injection rates. Yet, a sharp rise in the supply-demand differential, driven by increased power generation and industrial consumption, signals evolving market dynamics as LNG exports dip. Weather stabilization and regional trends further shape this outlook, which we explore in detail below.
Current prices compared to price dispersion 10 days before expiration by month since 2010
The expiration of contract Q was in line with the median for the last 15 years. Contract U is trading close to the median. The prices of subsequent contracts have not changed significantly. The 2025 fall contracts are trading slightly above the median values on the expiration date, while remaining within the interquartile range. The 2026 and 2027 winter contracts continue to be above the upper quartile.
Forward curve compared to 2020-2024
(Lower graph on the right)
Despite the fact that prices for 2025 contracts with delivery in three years have approached the levels of similar contracts for 2023 and 2024, there remains a pronounced skew in the forward curve in segments with the nearest (1–2 years) and most distant (5–6 years) deliveries.
Current stocks and forecast for next week compared to 2019-2024
For week 30 (July 21-27), we expect an increase in storage of 39 BCF. The fill rate remains firmly above the median for the previous five years. Injection rates are maintaining positive momentum. If the current supply and demand conditions remain unchanged, peak levels similar to those seen in 2024 are possible. Weather and seasonal phenomena in the second half of summer and early fall remain a limiting factor.
Weekly HDD+CDD total based on current NOAA data and forecast for the next two weeks compared to 1994-2024
In the current week 31, despite expectations of HDD+CDD growth, the weather stabilized and reached the 30-year median. The following week (32) is forecast to be at the median level. The seasonal peak in weather has practically passed, and a decrease in HDD+CDD values is expected going forward.
(The graph on the left)
Explanation of the graph: the candles represent quantiles for 30 years from 1994 to 2024. Red dots represent 2024, green dots represent 2025, and blue dots represent the 2025 forecast.
Weekly HDD+CDD total based on current NOAA data and forecast for the next two weeks compared to 1994-2024 by region
(The graph at top right)
Looking at the regional breakdown, we can see moderate HDD+CDD levels in weeks 31-32 in virtually all regions except WS CENTRAL and MOUNTAIN.
Weekly total supply/demand difference compared to 2014-2024
In the current 31st week, the difference between supply and demand rose sharply above the median. With a slight decline in LNG exports, consumption for power generation and industrial production rose sharply.
