At 12:34 GMT, Natural Gas futures are trading $3.582, down $0.157 or -4.20%.

Can Hot Weather Forecasts Sustain High Demand

Last week, forecasts from NatGasWeather and Atmospheric G2 pointed to strong heat across the southern two-thirds of the U.S., with highs in the 80s to 100s across major East Coast cities and strong cooling demand into early July.

However, the current price retreat suggests traders are reassessing whether the heat will translate into sustained demand pressure, especially as lighter demand persists across the northern third of the country with milder temperatures.

EIA Inventories and the Federal Reserve’s Inflation Path in Focus

Thursday’s EIA report added to bearish undertones, showing a +96 bcf injection, well above the consensus of +88 bcf and the five-year average of +79 bcf, signaling ample supply with inventories now 6.6% above the five-year seasonal average.

Additionally, easing geopolitical tensions, including the Israel-Iran ceasefire, have reduced near-term LNG disruption risks via the Strait of Hormuz, removing a bullish tailwind from the market.

LNG Exports, Rig Counts, and Production Trends Drive Supply Narrative

Lower-48 dry gas production remains solid at 105.2 bcf/day (+1.7% y/y), while gas demand sits at 74.3 bcf/day (+1.0% y/y). LNG net flows to export terminals remain firm at 14.8 bcf/day (+7.4% w/w).