Analyst Highlights Natural Gas Contract ‘Implosion’

In an EBW Analytics Group report sent to Rigzone by the EBW team on Friday, Eli Rubin, an energy analyst at the company, highlighted an “implosion over the past week” in the July natural gas contract.

“The July natural gas contract rolled off the board at $3.261 yesterday – a 72.8¢ (-18 percent) implosion over the past week as the heat wave failed to sufficiently lift physical cash prices at Henry Hub,” Rubin said in the report.

“Yesterday’s 96 billion cubic foot bearish Energy Information Administration (EIA) injection, while largely a make-up for last week’s bullish surprise, further weighed on prices,” Rubin added.

In its latest weekly natural gas storage report, which was released on Thursday, the EIA stated that working gas in storage was 2,898 billion cubic feet as of Friday, June 20, 2025, according to EIA estimates.

“This represents a net increase of 96 billion cubic feet from the previous week. Stocks were 196 billion cubic feet less than last year at this time and 179 billion cubic feet above the five-year average of 2,719 billion cubic feet,” the EIA said in its report.

“At 2,898 billion cubic feet, total working gas is within the five-year historical range,” the EIA added.

In the EBW Analytics Group report, Rubin stated that the early to mid July weather outlook is warming and LNG demand is firming and highlighted that “both can develop further in a bullish direction over the next few weeks”.

“Supply readings may churn higher near term, though, amid intramonth nomination patterns and concluding maintenance – potentially subduing upside into early next week,” Rubin said in the report.

Rubin also pointed out in the report that, “technically, the August contract appeared to find support yesterday, bouncing 12¢ off intraday lows at $3.403”. He highlighted in the report that the August natural gas contract “is testing higher this morning”.

“A short-term technical rebound may extend in the immediate term but may require firming LNG and building summer heat to sustainably extend higher,” he went on to state.

In an EBW Analytics Group report sent to Rigzone by the EBW team on Thursday, Rubin noted that natural gas “continue[d]… to slump ahead of July final settlement”.

“The July natural gas contract slumped into options expiry yesterday, closing down 58¢ off Thursday’s high as offtakers focus on continued soft physical market realizations,” he said.

“Henry Hub spot prices cleared above $3.50 per million British thermal units (MMBtu) only once in the past two months during sweltering late-June heat – suggesting risk is to the downside,” Rubin added.

“July final settlement today poses volatility risks at the front of the curve. Continued LNG inconsistency, hints of rising production, and a lack of hotter weather are putting up little resistance to the evaporating bullish momentum,” he went on to state.

“The seasonal storage trajectory remains on a path towards 3,850 Bcf in the most-likely scenario, suggesting current pricing is hardly unreasonable,” he continued.

In that report, Rubin noted that, in EBW’s view, “another eventual heat wave into midsummer and stabilizing LNG may drive higher gas prices over the next 30-45 days before relapsing in late summer or early autumn”.

The EIA’s latest short term energy outlook (STEO), which was released on June 10, projected that the Henry Hub spot price will average $4.02 per MMBtu in 2025 and $4.88 per MMBtu in 2026.

That STEO forecast that the commodity would come in at $3.26 per MMBtu in the second quarter, $4.01 per MMBtu in the third quarter, $4.67 per MMBtu in the fourth quarter, $5.35 per MMBtu in the first quarter of 2026, $4.39 per MMBtu in the second quarter, $4.87 per MMBtu in the third quarter, and $4.92 MMBtu in the fourth quarter.

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