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Daily Natural Gas Market Update 7-2-25

By: Heather Wine, Senior Risk Manager - Energy

Daily Natural Gas Market Update
 
Heather Wine
 
Senior Risk Manager | (312) 373-8250StoneX Financial Inc. - FCM Division Heather.Wine@stonex.com 
StoneX Value Matrix
image-20250702081050-1
Source: StoneX Value Matrix (2), Bloomberg
StoneX Commodity Indicator
image-20250702081120-2
 
Source:  StoneX Commodity Indicator (1), Bloomberg
Fundamentals & Weather

The nat gas market extended Monday’s plunge into Tuesday’s trade given healthy production levels and unsteady demand expectations. More mild weather forecasts should keep demand tempered while allowing for above normal injections.  Aug NG settled 4.1 cents lower at $3.415.

image 115185
Source: Bloomberg, CME

Following last week’s surprisingly larger than expected injection, a much smaller build is anticipated for the week ended June 27 given tighter fundamentals due to record heat.   A build of 51 BCF is expected which would mark the first time since the 2nd week of April that stocks rose less than the 5 yr avg.    Tomorrow’s number will compare to last year’s build of 35 BCF and the 5 yr avg build of 61 BCF.  

Early estimates for the week in progress show a build of 54 BCF which compares to last year’s build of 61 BCF and the 5 yr avg build of 53 BCF. 

image 115186​​​​
Source: NOAA

Renewable energy, particularly solar generation, is helping take the pressure off of natural gas.  Power burn during June 2025 was 1 BCF/day lower year over year while solar generation rose nearly 29% year over year in June.  Last marked the 3rd time in 4 months that power burn came in below prior year levels, signaling a reversal of the recent strong upward trend.  Looking ahead, power burn could remain subdued through the first half of July as temps average closer to normal

image 115187
Source: Bloomberg

Prices are recovering this morning  with the spot month up about 7 cents.  

Technical Analysis

 

image-20250702081358-3
Source: Bloomberg, CME

The August 25 natural gas contract traded down to a 3.293 low on Tuesday but recovered much of the early losses by the close as it settled the day at 3.415, down .041.

Buyers came in to bid the August contract back higher after it closed the gap created last week on the 60-minute chart at 3.320 during expiration of the July 25 contract.

The open gap was a bearish technical signal until closed.  With the gap closed, the trend may be ready to turn back up following a .458 (12.2%) sell off over the past two sessions.

There should be strong resistance at the 3.545 (40 day)-3.580 (10 day) area where the 10 and 40 day moving averages have converged on the daily continuation chart.

If this resistance is broken, last week’s 3.751 high will become the next area of resistance.

But while the near term trend may turn back higher, the longer term trend is slowly turning back down.

Tuesday’s 3.294 low is near term support followed by last week’s 3.199 low.  Longer term support is at 3.000 and 2.750.

Moving Average Alignment – Neutral
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bearish

Relative Strength Index - 47.23

image 115190
Source: Bloomberg, CME
image 115189
Source: Bloomberg, CME
image 115188
Source: Bloomberg, CME
image 115092
Source: Bloomberg, CME, StoneX Value Matrix (2)
image 115091
Source: Bloomberg, CME, StoneX Value Matrix (2)
Forward Curve Pricing
image 115191
Source: Bloomberg, CME
 
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