NEW YORK, July 3, 2025 — U.S. natural gas futures rose this week amid mounting demand for electricity-driven cooling and a resurgence in liquefied natural gas (LNG) activity. The August front-month gas futures contract climbed more than 2% to settle at $3.49 per million British thermal units (MMBtu) on July 2, according to trading data from the New York Mercantile Exchange (NYMEX).
The price surge comes as meteorologists predict a significant heatwave across much of the continental U.S. in mid-July. Higher-than-normal temperatures are expected to drive widespread use of air conditioning, placing additional pressure on power grids. Forecasts from LSEG Weather Research estimate total degree days (TDDs) for the coming two weeks at 206, well above the seasonal norm of 172. Degree days are a standard measure used to estimate energy demand for heating or cooling buildings.
“We’re starting to see some heat coming onto the maps for the middle of July, and that’s bringing some support back into the natural gas markets,” said Gary Cunningham, director of market research at Tradition Energy, in a public commentary.
The warmer weather is also converging with other bullish factors, including the return of several key LNG terminals from scheduled maintenance. Gas flows to major U.S. LNG export facilities, which had dipped in recent weeks, are beginning to recover. While average daily feedgas deliveries to LNG plants stood at 14.4 billion cubic feet per day (bcfd) last week—down from May’s record of 14.9 bcfd—analysts expect throughput to rise again as plants come back online.
Meanwhile, gas output in the Lower 48 U.S. states averaged 101.8 bcfd so far in July, slightly up from 101.6 bcfd in June. That figure is nearing the all-time monthly production record of 102.2 bcfd set in December 2023.
Despite the strong output, natural gas storage remains a critical variable for market participants. The U.S. Energy Information Administration (EIA) is scheduled to release its next weekly storage report on July 5. Traders will be closely watching for any signs of tighter-than-expected inventories, particularly as the market begins to price in risk for the upcoming winter season. Some analysts suggest that weaker storage injections over the summer could push January 2026 futures prices toward $5 per MMBtu, especially if severe cold materializes later in the year.
The current price dynamics reflect a tug-of-war between strong production and surging seasonal demand. In recent years, LNG exports have become an increasingly influential factor in U.S. gas markets, tying domestic prices more directly to global energy trends. With European gas storage levels healthy but Asian spot prices firming, U.S. LNG remains competitively positioned.
Natural gas remains a critical fuel source for electricity generation, especially during periods of extreme weather. According to the U.S. EIA, gas-fired power plants supplied more than 40% of U.S. electricity in 2024, and that trend is expected to continue this summer.
As the summer heat intensifies and maintenance schedules wind down, traders and utilities alike will be monitoring how supply and demand imbalances unfold. Volatility in the natural gas markets is likely to persist through the peak cooling season and into the fall, as both domestic and international developments shape the energy outlook.
