US Natural Gas Drops to Over 3-Month Low

US natural gas prices dropped to $2.62 per MMBtu, the lowest level since April, pressured by a larger-than-expected build-up in storage. The EIA report showed energy firms injected 33 bcf of gas into storage in the week ended July 31, exceeding forecasts of a 31 bcf increase, last year’s 13 bcf build, and the five-year average rise of 23 bcf. On top of that, production remained near record highs despite a slight easing, with Lower 48 dry gas output averaging 110.6 bcfd so far in August, compared with a record 110.7 bcfd in July. LNG feedgas demand also continued to weaken, with average flows to the nine major LNG export plants falling to 16.9 bcfd so far this month from 17.2 bcfd in July, due partly to reduced operations at Freeport LNG in Texas and the single operating liquefaction train at Golden Pass. These factors more than offset support from expectations of higher weather-driven demand, with forecasts pointing to mostly above-normal temperatures through August 21.

US natural gas prices declined below $2.7 per MMBtu, reaching their lowest level in more than three months, as expectations for weaker demand and milder weather weighed on the market. Forecasts pointed to moderating temperatures across much of the country in the coming weeks, reducing the likelihood of a significant increase in gas consumption. Prices have also been pressured by record production levels and ample inventories, with storage volumes remaining above the five-year average since March due to strong output and mild spring conditions. Analysts expect inventories to stand around 6.6% above normal for the week ended July 31. US Lower 48 gas production averaged a record 110.7 billion cubic feet per day in July, while flows to major LNG export facilities declined due to maintenance disruptions. Meanwhile, improving prospects for a US-Iran agreement and potential reopening of the Strait of Hormuz further reduced energy market concerns and added downward pressure on prices.

US natural gas prices edged up to around $2.77 per MMBtu after the latest EIA report showed a smaller-than-expected increase in storage last week. Energy firms added 28 billion cubic feet of gas in the week ended July 24, below market expectations for a 35 bcf build. Despite the modest rebound, prices remained near their lowest level since early May as inventories stayed 6.4% above the five-year seasonal average, indicating ample supply. Production also remained strong, with output in the Lower 48 states averaging 110.6 bcfd so far in July, matching the record monthly high set in December 2025. LNG export demand softened slightly, with flows to major export terminals averaging 17.2 bcfd, down from 17.4 bcfd in June, partly because of scheduled maintenance at Freeport LNG’s Texas facility. Updated weather forecasts calling for cooler temperatures across the central and eastern US in the coming weeks also weighed on prices by reducing expected air-conditioning demand.