Nymex natural gas falls 2.5% to $3.147 as weather outlook cools

U.S. natural gas futures slid Monday as weather models shed heat for the second half of June and liquefied natural gas export flows remained constrained by spring maintenance, snapping a three-session winning streak.

The July contract on the New York Mercantile Exchange settled at $3.147 per million British thermal units, down 2.5% on the day after touching an intraday low of $3.139. The decline erased gains from late last week when hotter temperature forecasts and a below-average storage build had pushed prices higher.

"The July contract ran into a bearish weekend trifecta of milder weather forecasts, weak LNG and rising supply," said Eli Rubin, an analyst at EBW Analytics. Speculators pared back short positions in the week ended June 2 while adding to longs, he noted, adding that "while a short-term top may be in near $3.39/mmBtu, unexpected bullish catalysts could trigger a run higher and threaten a wider short-covering event."

The pullback came as forecasters lowered temperature expectations for the second half of June, reducing the outlook for power-sector demand. About 40% of U.S. electricity generation comes from gas-fired plants, making the fuel highly sensitive to summer cooling demand. LSEG data showed average gas output in the Lower 48 states at 109.0 billion cubic feet per day so far in June, down from 109.7 bcfd in May and a monthly record of 110.6 bcfd in December 2025.

LNG feedgas flows averaged 16.3 bcfd in June through Monday, down from 17.1 bcfd in May, as seasonal maintenance idled capacity at several major export facilities. ExxonMobil and QatarEnergy's Golden Pass terminal in Texas and Freeport LNG's nearby plant both underwent planned work, reducing the volume of gas pulled from the domestic market. Daily flows touched a four-month low of 15.7 bcfd on Tuesday last week, according to LSEG.

The inventory surplus relative to the five-year average narrowed to about 5.9% in the week ended May 29, down from 6.2% a week earlier, as recent production declines helped absorb some of the spring storage overhang. LSEG projected total U.S. gas demand, including exports, would rise to 99.9 bcfd next week from 98.3 bcfd this week, though the forecast was revised lower from Tuesday's outlook.

Andy Huenefeld of Pinebrook Energy Advisors said the first meaningful heat of the season expected later this week should drive the strongest power generation demand of 2026 so far. Pinebrook maintained its one-to-three-month bullish outlook "with the caveat that the market likely needs sustained heat or stronger LNG demand to extend the rally."

The last time the July contract traded above $3.30 was in late May, when a brief heat wave pushed prices to a three-month high before cooler forecasts reversed the gains. If sustained heat materializes in the final week of June, the market could test resistance near $3.39, Rubin said. Conversely, a return to mild conditions or further LNG outages could push prices back toward the $3.00 support level that held through most of May.

This article is for informational purposes only and does not constitute investment advice.