Currently, the price of gas is influenced by various factors determining its market dynamic. These factors include the midsummer changing weather conditions across the U.S. and Europe, with certain light anomalies leading to occasional demand spikes concurrently driving prices up. Additionally, the increase in gas storage levels plays a pivotal role in containment of price swings, as higher storage levels result in downward pressures on prices due to surplus supply. Furthermore, the surge in liquefied natural gas (LNG) exports has a significant impact on gas prices globally, as higher export levels can limit respective domestic supplies subsequently driving spot prices higher. Hereby we attempted to summarize our monitoring of these factors to understand and anticipate the gas price changes effectively.
U.S. Storage Levels: Production is largely keeping up with summer demand
As of July 18, 2025, working natural gas storage in the Lower 48 U.S. states stood at 3,075 billion cubic feet (Bcf), reflecting a weekly injection of 23 Bcf, according to the latest EIA report. This level is 153 Bcf below last year’s inventory at the same time, yet 171 Bcf above the 5-year average of 2,904 Bcf, placing current storage comfortably within the historical range. Regionally, the largest contributions to the build came from the Midwest (+16 Bcf) and East (+6 Bcf), while the Salt region saw a notable net withdrawal of 10 Bcf due to intense cooling demand. The South Central region, which holds the largest volume, posted a slight 5 Bcf withdrawal, a rare midsummer draw likely linked to elevated power generation needs amid heat.
The fact that total inventories are still rising, albeit at a slower pace, indicates that production is largely keeping up with summer demand. With storage levels now entering the upper tier of seasonal norms, the gas market finds itself with a buffer heading into late summer—though ongoing weather extremes could still shape the trajectory of future injections.
U.S. Weather Conditions: Heat Dome Blocked Atlantic Weather Systems
Over the past week, the U.S. experienced predominantly warm conditions with average daytime temperatures ranging from +20°C to +28°C. However, starting July 20–21, a powerful and prolonged heatwave developed, affecting much of the Central, Southeastern, and Midwestern states. Temperatures soared above 38°C, and in some areas, the heat index reached 43°C or higher. Nights were unusually warm as well, with lows up to 26°C, which is 5–15° C above the seasonal norm. This extreme heat is due to a heat dome that has blocked Atlantic weather systems, trapping hot air over a wide region. A large and persistent heat dome dominates the central, southern, and southwestern parts of the country, bringing widespread hot conditions to major cities such as Dallas, Houston, New Orleans, Phoenix, Las Vegas, and Atlanta. Meanwhile, a strong jet stream arcs northward before dipping sharply over the northeastern U.S. and southeastern Canada, creating a zone of cooler and less humid air. Cities like Boston, New York, Toronto, and Montreal fall within this cooler corridor, offering some relief from the intense heat elsewhere. This sharp division in temperature patterns underscores the influence of high-pressure ridging in the center of the continent and a trough allowing cooler air to filter into the Northeast.
Source: https://www.accuweather.com/en/news/heat-wave-alert
By July 22, the anomalous heat began expanding across the Midwest and Great Lakes and is forecasted to reach northern U.S. regions by the end of the week. A portion of the heat dome is expected to break off and move eastward, but this heatwave likely won’t last long. A push of cooler, less humid air is expected to reach New England over the upcoming weekend. The highest probability of above-average warmth is centered over the Gulf Coast states, including Texas, Louisiana, Mississippi, Alabama, Georgia, and Florida. This suggests that the ongoing heatwave in these regions will persist into early August. The central and western U.S., including parts of the Rockies and Pacific Northwest, also show a moderate likelihood of above-normal temperatures.
In contrast, the Upper Midwest, Great Lakes, and Northeastern U.S. are forecasted to experience near-to-below-normal temperatures, with the strongest cool anomaly expected in northern New England and parts of the Great Lakes. Additionally, parts of the West Coast and Alaska show tendencies toward cooler or near-normal conditions. Overall, this forecast reinforces a persistent north-south temperature gradient, with the southern tier of the U.S. continuing to face oppressive summer heat while northern regions may see some limited relief.
Source: https://www.cpc.ncep.noaa.gov/
The high-pressure area will continue to expand westward toward the Great Plains. The heat dome will keep dominating weather patterns, spreading intense heat and humidity to the northern, central, and eastern U.S., with expected highs between 35–40°C in the Midwest, Great Lakes, Mississippi Valley, and South. The West and Northwest may see short-lived cool periods and partial cloudiness, but overall, hot conditions will prevail. As the heat dome grows and shifts over the southern states, a jet stream dip from the Great Lakes to the Northeast may bring cooler, drier air fronts more frequently. Above-normal temperatures remain across the southern United States, particularly in the Southeast, Southern Plains, and parts of the Southwest. However, the intensity of the heat anomaly is forecasted to moderate slightly compared to the previous 6–10-day outlook. Meanwhile, a notable cool-down is expected in the northern half of the country, especially across the Upper Midwest, Great Lakes, and Northeast, where temperatures are projected to fall below normal. Much of the western U.S., including California and the Pacific Northwest, is forecasted to see near-normal conditions, with some cooler-than-normal tendencies along the coastal areas. Alaska shows a split pattern with above-normal temperatures in the interior and below-normal along the southern coastline. Overall, the outlook indicates a weakening of the widespread heat dome, with cooler air beginning to assert itself across northern regions, while southern parts of the U.S. continue to experience persistent summer warmth.
Source: https://www.cpc.ncep.noaa.gov/
As I already noted in the previous posts, Cooling Degree Days (CDD) is a metric used to estimate the demand for energy needed to cool buildings. In this respect, Texas (TX) and Louisiana (LA), with cumulative CDD values of 142 and 140 days respectively, are key drivers of national cooling demand due to persistent and extreme heat. Florida (FL), another major consumer, follows closely with 135 CDDs, reflecting sustained high temperatures and humidity. New York (NY) shows a moderate 83 CDDs, indicating shorter bursts of heat, while California (CA) remains relatively mild this season with only 23 CDDs, pointing to minimal air-conditioning demand. This widespread increase in CDDs reflects the ongoing heatwave across much of the U.S., particularly in the South and Southeast, where daily highs exceed 35–38°C. The weighted national CDD curve suggests that the combined effect of heat across top gas-weighted states is not only elevated but intensifying, reinforcing bullish pressure on natural gas markets due to strong and geographically broad power sector demand.
Throughout the month, weighted CDDs remained above normal more often than not, especially after July 22, when a sharp spike pushed the values well outside the historical range. By July 29, the weighted CDDs could reach almost 16 points, well above the 13-point norm, which could be the largest deviation of the month.
Europe’s Weather Conditions: Abnormally Diverse
Since July 16, 2025, Europe has experienced diverse weather conditions. Southern regions have faced anomalous heat, with temperatures peaking at 34–36°C. These areas also saw dry conditions accompanied by strong northwesterly winds. Meanwhile, a slow-moving low-pressure system over Central and Eastern Europe brought cooler-than-usual weather, with many cloudy days and intermittent rainfall. Daytime temperatures there did not exceed 25–27°C.
Source: https://www.cpc.ncep.noaa.gov/products/JAWF_Monitoring/Europe/temperature.shtml
Looking ahead, Central Europe is expected to continue experiencing mixed cloud cover, with temperatures ranging from +20°C to +25°C and occasional localized showers. In Southern Europe and the Balkans, the heat is forecasted to persist, although a slight temperature drop and increasing cloudiness are possible toward the end of July.
Widespread rainfall is expected in many regions, driven by a persistent low-pressure area. In contrast, Western and Southern Europe, including the Iberian Peninsula, France, Italy and Greece, remain largely dry, with minimal rainfall expected. The lack of rainfall in these regions, coupled with continued heat in the south, is contributing to continued reliance on gas-fired power for cooling. Meanwhile, wetter and cooler weather in Eastern and Northern Europe is curbing electricity demand, particularly for air conditioning, helping to stabilize regional gas consumption.
U.S. Production and LNG Exports: Strong global demand for U.S. gas
U.S. LNG exports are running near record levels this summer. Pipeline feed gas deliveries to liquefaction facilities averaged about 16.5 Bcf/day in the past week, which is at or very close to peak capacity. Over the week of July 10–16 alone, 30 LNG vessels departed U.S. ports carrying a total of roughly 114 Bcf of natural gas in liquefied form. Top export terminals like Sabine Pass, Corpus Christi, Cameron, Freeport, and the new Plaquemines terminal have all been dispatching multiple cargoes per week, reflecting strong global demand for U.S. gas. There have been no major outages or disruptions reported at these facilities recently; operations are steady, and feed gas flows are in line with expectations to support full export volumes.
On the import side, Asia’s heatwave has made Asian buyers more aggressive in procuring LNG cargoes, which has the effect of pulling some spot LNG supply away from Europe. Asian LNG spot prices have climbed to the upper-$12s per MMBtu, outbidding European prices which are around the low-$12s. Europe, meanwhile, has relatively ample gas in storage and somewhat lower summer demand, so European utilities have been content to import slightly less spot LNG than last summer. This dynamic represents a shift: more U.S. LNG is flowing to Asia at the margin, while Europe relies a bit more on its storage and pipeline supply in the short term. Nonetheless, Europe is still importing significant LNG to refill storage; the difference is that the urgency (and price) is lower than a year ago, thanks to high inventory levels and milder demand growth.
The consistently high level of LNG exports means that roughly 15–17 Bcf/d of U.S. production is being pulled out of the domestic market for international use. This export demand provides underlying support to U.S. gas prices. As long as global gas prices remain elevated relative to U.S. prices (and indeed they are, with Europe and Asia at ~$12–13/MMBtu vs. ~$3–3.6/MMBtu in the U.S.), U.S. LNG terminals will operate near full tilt. Looking ahead, there are few signs of export slowdown: feed gas volumes recently hit record highs (above 16 Bcf/d) and only dipped slightly when a heat-related dip in domestic production or maintenance occurred. Even routine maintenance abroad (for example, Norway’s scheduled summer pipeline maintenance) could tighten overseas supply and keep foreign gas buyers hungry for LNG, sustaining strong U.S. export flows. In summary, LNG exports remain a bullish factor for U.S. gas demand, effectively linking U.S. prices to global market strength this summer.
European Gas Storage Levels: Rebuilding Gas Reserves Despite Heatwaves
As of July 22, 2025, European natural gas storage levels stand at approximately 65.71% full, according to the latest data. This puts 2025 storage levels slightly behind the same date in 2022 (65.84%) but well ahead of 2021, which recorded just 53.58%. Despite being lower than the exceptionally high fill levels of 2020 (84.38%), 2023 (83.15%), and 2024 (83.13%), current storage remains within a comfortable historical range and continues to trend upward at a solid pace. The steady injection trajectory suggests that Europe is effectively rebuilding its gas reserves despite episodes of heat-driven demand in the south. This stability is largely supported by reduced overall gas consumption due to cooler-than-average temperatures in Central and Eastern Europe, strong LNG imports earlier in the season, and diversified pipeline supply. The current rate of injection provides a reassuring buffer heading into the late summer and fall, offering supply security ahead of the winter heating season.
Source: https://agsi.gie.eu/data-visualisation/filling-levels/EU
Western and Southern European countries, such as Spain, France, Portugal, and Italy, are in a strong position with storage levels exceeding 81%, indicating robust supply buffers. Central Europe, including Germany, Poland, and Austria, also demonstrates solid progress, reflecting continued successful injections. In contrast, some Eastern European and Nordic countries are lagging. Ukraine, Belarus, and Latvia show particularly low storage levels, raising concerns about their winter supply security. Sweden and Slovakia are in the moderate range, suggesting room for further buildup. Romania and Bulgaria also fall into this intermediate zone. Overall, the western half of Europe appears well-stocked, while several eastern and northern nations show storage deficits that may require close monitoring or reliance on imports in the coming months. This disparity could influence intra-European gas flows and regional market dynamics as the winter heating season approaches.
Source: https://agsi.gie.eu/data-visualisation/filling-levels-country/map
Conclusion
Over the past week, U.S. natural gas prices (Henry Hub) declined sharply from above $3.60 to a low near $3.05 per MMBtu, before rebounding slightly to around $3.14/MMBtu by July 24. The drop reflects a mix of factors: easing near-term weather forecasts in the Northeast, strong storage injections, and technical selling pressure. Although a persistent heatwave continues across the South and Central U.S., slightly cooler trends in the North have helped temper the bullish momentum. Meanwhile, European benchmark prices (Dutch TTF) also fell, closing at €32.23/MWh, or approximately $9.50–9.60/MMBtu, reflecting high storage levels and mild summer demand in Central and Northern Europe.
Looking ahead, the U.S. gas market remains weather-driven and highly sensitive to changes in cooling demand. Forecasts still call for sustained heat in the South through early August, which should support power sector gas consumption. However, if storage builds continue at a strong pace and cooler air extends across the Midwest and Northeast, prices could face further downward pressure. The Henry Hub price to trade in a range of $3.00 to $3.30/MMBtu in the near term, with upside potential limited by ample supply and strong LNG exports already priced in. European prices are likely to stay subdued unless extreme heat returns or LNG supply disruptions occur.