Over the past week, the natural gas market has been navigating a complex and volatile landscape, influenced by a confluence of environmental and logistical factors. In the U.S., a strong cold front has brought a significant drop in temperatures across the northern, central, and eastern states, signaling an early shift toward cooler weather. Having said that, Southern Europe continued to swelter under prolonged heatwaves, with temperatures exceeding 40°C, exacerbating drought and increasing energy demand for cooling. These diverging weather patterns were intersecting with crucial supply-side elements: while European gas storage levels stand at about 76.2% — a notable decrease from last year's 91% — high volumes of LNG exports have also been drawing heavily on available supplies. The combined effect of these factors created a dynamic market where fluctuating weather, constrained storage, and robust exports acted as the primary drivers of price.
Storage Levels USA: Total Storage within Historical Range
As of August 22, 2025, according to the EIA, U.S. working natural gas in underground storage stood at 3,217 Bcf, reflecting a net weekly injection of 18 Bcf. Inventories were 112 Bcf below last year’s level but remained 154 Bcf above the five-year average, keeping total storage within the historical range.
Regionally, the East, Midwest, and Pacific all posted small builds, while the Mountain region recorded a slight withdrawal. The South Central region saw a modest net decline, driven mainly by draws from salt storage. Overall, storage levels remain comfortable heading into the fall, with stocks sitting above the seasonal norm, providing a solid buffer for the winter heating season despite being lower than last year’s exceptionally high levels.
U.S. Weather Conditions: Significant Temperature Drops
Over the past week, the U.S. experienced a significant drop in temperatures as a strong cold front and a large Arctic cyclone over Canada pushed chilly air southward into the northern, central, and eastern states. Tropical Storm Fernand formed over the Atlantic. The system has been moving eastward at around 12 mph, keeping it well away from the U.S. East Coast, however. Forecasts from the National Hurricane Center projected Fernand to continue tracking eastward into the open Atlantic over the coming days, gradually weakening. While the storm is not expected to directly affect terrains, it highlighted the ongoing tropical activity in the Atlantic basin at the tail end of August. Its presence may still influence shipping routes and energy market sentiment, but no immediate impacts on North America or Europe are anticipated.
Source: https://www.nhc.noaa.gov/
As a result, temperatures were 6–12°C below normal for late August, with nighttime lows in northern areas falling below 10°C. In contrast, the Western U.S. (Pacific Coast and Southwest) remained relatively warm under the influence of high-pressure systems and dry air masses. Meanwhile, the Southeast was affected by a low-pressure zone, bringing clouds and rainfall.
Source: https://www.cpc.ncep.noaa.gov/
This cooler-than-normal pattern will likely persist, especially in Central and Eastern regions, where daytime highs are expected to be around 20–25°C and nighttime lows 10–15°C. The Western and Southwestern states will stay warmer, with highs of 28–33°C. Thunderstorms are possible in the Central U.S. and the Northeast. Some northern areas may even experience frost and chilly nights, signaling the seasonal transition from summer to autumn. Overall, the U.S. is entering a cooler, wetter phase with reduced air-conditioning demand, which is expected to lower nationwide electricity and gas consumption.
Source: https://www.cpc.ncep.noaa.gov/
Between August 20–27, 2025, Cooling Degree Days (CDD) across the major U.S. states showed a clear decline compared to the earlier peak summer period, reflecting the widespread cooldown. Texas (111 CDD) and Louisiana (103 CDD) still recorded substantial cooling demand, but levels were well below the extreme values observed in late July. Florida maintained high demand at 117 CDD, driven by persistently hot and humid conditions in the Southeast. In contrast, California (63 CDD) and New York (only 9 CDD) highlighted the regional disparities: the West Coast saw moderate cooling demand, while the Northeast transitioned quickly toward more autumn-like conditions.
Looking ahead to August 29–September 2, forecasts call for continued cooler-than-normal temperatures in the Сentral and Eastern U.S., suggesting a further drop in national CDDs and reduced air-conditioning load. Overall, the shift from intense heat to more seasonable or cool weather marks a turning point in U.S. gas demand dynamics, with electricity-driven consumption easing as the country moves into September.
CDD values have been falling from earlier peaks of around 13–14 toward a range of 7–9, well below the long-term average (≈11–12). This reflects the widespread cool spell that swept through much of the Central and Eastern United States, reducing air-conditioning use and sharply curbing natural gas consumption for power generation. CDDs will remain suppressed relative to normal, staying closer to the lower bound of the climatological range. This suggests continued softness in electricity-driven natural gas demand, particularly in the Midwest, Northeast, and parts of the South where cooler air persists. With this early seasonal shift, natural gas markets are likely to see weaker short-term fundamentals, as the sharp decline in cooling demand coincides with ongoing strong LNG exports and steady storage injections.
In Europe, the past week was marked by positive temperature anomalies, with temperatures 1.5–3°C above normal. Central, Southern, and Eastern Europe saw daytime highs of 28–36°C, while parts of the south and southeast reached 30–38°C. A dominant anticyclone maintained warm, dry, and clear conditions, intensifying droughts and wildfire risks in the south and central regions. The Northwest and Northern Europe faced cooler conditions, with near-normal or slightly below-normal temperatures due to frequent cyclones.
Source: https://www.cpc.ncep.noaa.gov/products/JAWF_Monitoring/Europe/temperature.shtml
The outlook remains largely warm and dry across much of Europe, with daytime highs generally to remain between 22–32°C. Southern and Eastern regions will continue to face intense heat, with occasional peaks of 35–38°C, while the North and Northwest will stay cooler (15–22°C) with more rainfall. Persistent dryness in the South means a high risk of fires remains in place.
U.S. Production and LNG Exports: Optimizing Cargo Flows and Capturing Market Value
Liquefied Natural Gas export demand remains a major supporting factor for natural gas markets in 2025. U.S. LNG exports in particular are running near record highs. In August, feed gas deliveries to the eight large U.S. LNG terminals averaged about 15.8 Bcf/d, up from ~15.5 Bcf/d in July. (For reference, this is roughly double the LNG feedgas demand of just a few years ago.) On some days this month, flows have touched 15.5+ Bcf/d as facilities maximized their output. Together, these levels are approaching the all-time monthly peak (~16.0 Bcf/d) observed in April. Such strong export throughput underscores that global demand for LNG is robust, with Europe continuing to import large volumes of U.S. gas and Asia also showing signs of increased buying.
In industry news, some significant personnel moves highlight the strategic importance of LNG. ExxonMobil has appointed Sid Bambawale – the former head of Vitol’s Asia LNG trading – to lead Exxon’s global LNG trading and Asia gas & power divisions, starting September 1. Bambawale’s move from Vitol (the world’s top independent energy trader) to a supermajor like ExxonMobil signals an intensified focus on LNG trading by the oil and gas giants. The implication for the market is that big producers are bolstering their trading capabilities to better compete in the flexible, fast-growing LNG arena.
With Europe’s shift away from Russian gas and LNG volumes expanding globally, trading expertise is increasingly valuable for optimizing cargo flows and capturing market value. In practical terms, greater involvement by majors in trading could improve market efficiency, but also elevate competition for cargoes. For natural gas prices, the expansion of LNG trading operations by firms like ExxonMobil is a reminder that U.S. gas is now firmly tied to global LNG dynamics. As companies jockey for position in LNG, their decisions (e.g. how aggressively to procure or market cargoes) can influence international LNG prices and arbitrage, which in turn feed back into domestic gas price expectations. Overall, the LNG export landscape is marked by high volumes and strategic moves that underscore LNG’s growing role in the gas market – both as a source of demand supporting current prices and as a catalyst reshaping how companies participate in the market.
According to the latest data from S&P Global Commodity Insights, U.S. natural gas production saw a modest increase last week. Dry gas output rose by 0.6% (0.7 Bcf/d), bringing the national average to 107.4 Bcf/d. At the same time, average net imports from Canada declined by 3.5% (0.2 Bcf/d) compared with the previous week, highlighting stronger domestic supply and reduced reliance on cross-border flows. Overall, the total U.S. gas supply grew by 0.4% (0.5 Bcf/d), reflecting steady production gains and signaling that the domestic market remains well supplied despite fluctuations in demand.
European Gas Storage Levels: Much Lower than Same Time Last Year
As of August 25, 2025, according to aggregated EU data, European natural gas storage levels stood at about 76.2% full. That was significantly lower than the same time last year, when storage was above 91%, and also below the five-year highs reached in 2020 and 2024. However, it remains comfortably above the levels seen in 2021 (≈65%), reflecting steady injections throughout the summer. The current pace of filling suggests that Europe is on track to meet its pre-winter targets, though the gap compared to last year underscores the heavier drawdowns experienced during the previous heating season. With storage still climbing toward winter, market sentiment is balanced: supplies remain adequate, albeit drifting to lower levels compared with 2023–24 figures, which keeps some risk premium in prices ahead of colder months.
Source: https://agsi.gie.eu/data-visualisation/filling-levels/EU
Presently, Europe’s gas storage picture shows significant regional variation. Western and Southern European countries such as Spain, France, Italy, and Germany have storage at high levels, reflecting strong summer injections and stable LNG inflows. Central European states including Poland and Austria are at moderate to good levels, indicating steady progress toward winter readiness. In contrast, Northern Europe, particularly Sweden, shows relatively low reserves, while some Eastern European countries remain at very low levels, signaling vulnerability ahead of the heating season. Overall, Europe as a whole sits at an average-to-strong storage position, but regional disparities highlight areas of potential supply risk if winter demand spikes.
Source: https://agsi.gie.eu/data-visualisation/filling-levels-country/map
Conclusion
Over the past week, natural gas markets have shown mixed regional dynamics. In Europe, Dutch TTF benchmark prices declined toward €32.5/MWh ($10.5/MMBtu), reflecting easing demand due to mild weather, strong LNG inflows, and continued storage injections. The downward pressure suggests that supply confidence is currently outweighing short-term demand concerns. Meanwhile, in the U.S., Henry Hub prices rebounded to around $2.88/MMBtu after dipping below $2.64 earlier in the week. This recovery was driven by steady LNG export demand, slightly tighter-than-expected storage builds, and production levels stabilizing after recent highs. The contrast highlights how U.S. prices remain influenced by both domestic fundamentals and international LNG market conditions.
Looking forward, the forecast points to limited upside in the near term. Cooler-than-normal weather across much of the U.S. is set to reduce power sector demand for gas in the coming days, likely keeping Henry Hub capped below $3.00/MMBtu in early September. However, firm LNG export flows near record levels and Europe’s continued import needs will provide a price floor, preventing a steep decline. In Europe, prices may soften further if injections continue strongly and weather remains moderate, but any unexpected heatwaves or supply disruptions could quickly reverse the trend. Overall, U.S. natural gas is expected to trade in the $2.70–$3.00/MMBtu range in the short term, with modest bullish potential if LNG demand strengthens.