Energy News: Natural Gas Trending Higher After Reaching Spring Low
Energy News Update: June 16th, 2025 Natural Gas Trending Higher After Reaching Spring Low Natural Gas is the largest power source
Energy News Update: June 16th, 2025 Natural Gas Trending Higher After Reaching Spring Low Natural Gas is the largest power source
Energy News Update: June 16th, 2025
In our Apr 28th Energy Update, we said relatively warm weather across much of the United States in March continued in April, leading to less Natural Gas being withdrawn from storage than forecasted, and the 10% supply deficit at the end of March virtually disappeared, leading to a deeper short-term decline than we anticipated in April.
But after reaching this year’s Spring Shoulder low in April, Natural Gas is trending higher, and we believe the average price of Natural Gas will continue to trend higher over the next 18 months.
Our view was supported by the EIA’s latest Short Term Energy Outlook (STEO), released on June 5th, in which they predict Natural Gas’s price will average $4.00 per MMBtu in 2025, up from $2.20 in 2024, and will increase another 90 cents per MMBtu in 2026 to approximately $4.90. They believe prices will continue to trend higher due to surging domestic electricity demand and exports internationally outpacing production growth.
Our concern is that the risk of higher prices this summer is significant. The National Oceanic and Atmospheric Administration (NOAA) forecasts hotter-than-average temperatures across much of the United States this summer, along with a very active hurricane season, which could trigger an explosive rally.
And if a major rally doesn’t materialize this summer, as we pointed out in our last report, longer term, when prices were as low as they were in 2024, it always preceded Cyclical Bull markets that trended higher for at least 2 to 4 years, regardless of who was president.
Therefore, given the EIA’s long-term forecast of where prices will average in 2025 and 2026, and the short-term risk of higher prices this summer, we recommend that anyone with agreements that expire within the next 18 months reserve Natural Gas and Electricity to be available when their present contracts expire.
Not every client’s risk tolerance and hedging strategy is the same, but hopefully, today’s report helps you understand your risk/reward opportunities. We invite you to contact one of our energy analysts to help develop a hedging strategy tailored to your situation.
Ray Franklin
Energy Professionals
Senior Commodity Analyst
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