Weekly Energy Market Update – May 13, 2025

Natural Gas Supply Trends

The latest EIA storage report showed a robust injection of 104 Bcf for the week ending May 2, well above the five-year average of 79 Bcf. U.S. underground storage now sits just above the five-year average, though still significantly below last year’s levels.
Despite these strong injections and continued high production, prompt-month natural gas prices have been climbing. Henry Hub futures recently settled around $3.80/MMBtu, up from last month, as the market anticipates higher demand with the onset of summer-like temperatures.
The near-term market is shaped by a mix of weak fundamentals, ample supply and storage, and bullish technicals, with speculators reentering after April’s sharp deleveraging. While repeated large storage injections could pressure front-month prices, technical momentum and summer cooling demand expectations support gains.
On the supply side, U.S. dry gas production remains near record highs, with year-over-year growth driven by new pipeline capacity in the Permian and Marcellus regions. LNG feedgas deliveries have also reached new records, averaging above 16 Bcf/d in April.

U.S. natural gas demand saw a modest week-over-week increase, led by higher industrial and power sector consumption, even as residential and commercial demand dipped due to mild spring weather.
LNG exports remain a key driver, with current flows holding near record levels despite a brief slowdown. The U.S. continues to supply a significant share of Europe’s LNG needs as the EU phases out Russian gas, and new U.S. export capacity is coming online.
Market sentiment was also boosted last week by news of eased U.S.-China tariffs, which could spur additional industrial and transportation demand for natural gas.
Looking ahead, the EIA forecasts that natural gas prices will continue to rise into the summer as LNG exports grow and demand from the electric power sector increases with hotter weather.

Suppliers are adjusting capacity charges, with most offering either near the $175/MW-day floor or closer to the current market rate of $270. Fixed all-in contracts with capacity included now carry a premium. The most cost-effective strategy is to pass through actual capacity costs rather than locking in at potentially inflated or understated rates.

May 12–18: The week opens with weather systems bringing showers and thunderstorms across much of the U.S., keeping temperatures moderate in the 60s–80s for most regions. The Southwest and Texas will see hotter conditions, with highs in the 90s to low 100s, driving stronger national demand mid-to-late week. Expect light national demand early in the week, rising to moderate levels as temperatures climb.

Storage injections remain strong, but rising summer temperatures and robust LNG exports support higher prices.
Industrial and power generation demand increases, offsetting weaker residential/commercial consumption.
Market volatility is likely as technical factors and speculative activity interact with shifting supply-demand fundamentals.
For buyers, consider flexible capacity arrangements to avoid unnecessary premiums in a dynamic market.

Stay tuned for next week’s update as we monitor storage trends, LNG flows, and the evolving summer demand picture.