Market Update: Natural gas markets moved sharply higher this week as a combination of tighter fundamentals and warming weather forecasts pushed NYMEX July futures to an 11-week high. The rally gained momentum following the release of the EIA’s weekly storage report, which showed a 92 Bcf injection for the week ending May 22 — 1 Bcf below the Platts consensus estimate and well below last year’s 119 Bcf build for the same period. The smaller-than-expected year-over-year injection helped narrow the storage surplus, adding to the bullish tone already building in the market.

July 2026 NYMEX closed Thursday at $3.285

·      High for the day $3.298

·      Low for the day $3.057

Early trading for the prompt month is trading at $3.346

·      https://www.cmegroup.com/markets/energy/natural-gas/natural-gas.html

·      https://www.fxempire.com/commodities/natural-gas

Following the storage print, NYMEX July natural gas futures rose approximately 5 cents to trade at $3.22/MMBtu, before continuing higher to an intraday peak near $3.30/MMBtu — the highest level in 11 weeks. The rally reflects growing market conviction that the balance of summer will be tighter than earlier expected, driven by warming late-June weather outlooks, subdued production, and anticipated recovery in LNG feedgas demand as maintenance wraps up at Freeport and Cameron LNG.

Total US natural gas storage now stands at 2,483 Bcf, approximately 144 Bcf, or 6%, above the five-year average. While the surplus to the five-year average remains notable, it declined by 5 Bcf this week. More significantly, the surplus compared to last year has narrowed sharply to just 21 Bcf — less than 1% — signaling that year-over-year storage cushion is nearly gone and the market is tightening relative to 2025 conditions.

Weather is adding to the upward price pressure. The forecast for late June has turned warmer, which is expected to drive a significant jump in electricity demand for air conditioning — pushing natural gas used for power generation toward 40 Bcf/d by early June. While cooler near-term temperatures could temporarily slow the rally, the combination of rising demand and tighter supplies sets a supportive tone for prices heading into the peak summer season.

Looking ahead, all eyes remain on the incoming weather pattern and next week’s EIA storage report. If the late-June warm-up materializes as forecast, further price support is likely as the market transitions into the heart of summer cooling season.

EIA Storage Report: According to the EIA, working natural gas in storage totaled 2,483 Bcf as of May 22, 2026, reflecting a 92 Bcf increase from the prior week. Storage levels were 21 Bcf higher than the same time last year and 144 Bcf above the five-year average of 2,339 Bcf. The reported injection was below both the five-year average injection of 97 Bcf and the year-ago addition of 119 Bcf, narrowing the five-year surplus by 5 Bcf. Overall inventories remain within the historical five-year range.

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Weather: NOAA’s official summer outlook calls for above-average temperatures across most of the US this summer, with the strongest heat expected in the West and Pacific Northwest. Major cities like Chicago, New York, and Philadelphia are forecast to see 90-degree days at or above normal. The Upper Midwest and Great Lakes are the one area where the outlook is less certain.

El Niño is expected to develop this summer and strengthen through the rest of 2026, which typically brings hotter, drier conditions to much of the country. It also tends to keep the Atlantic hurricane season quieter — NOAA is forecasting a below-normal season with 8 to 14 named storms. That said, even a slower hurricane season can still bring storms to the Gulf Coast, where any disruption can impact natural gas production and exports.

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