US Natural Gas Prices Surge 15% as Heat Wave Forecasts Intensify
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
natural-gasng
Fazen Markets Editorial Desk
Collective editorial team · methodology
Trades XAUUSD 24/5 on autopilot. Verified Myfxbook performance. Free forever.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The majority of retail investor accounts lose money when trading CFDs. Vortex HFT is informational software — not investment advice. Past performance does not guarantee future results.
Fazen Markets confirmed on 29 May 2026 that US natural gas futures experienced a sharp rally, climbing 15% in a single session. The July Henry Hub contract settled at $3.72 per million British thermal units (MMBtu), marking its highest close in eight weeks. The move was directly attributed to updated meteorological models projecting sustained above-average temperatures across key US demand regions throughout June, threatening to rapidly deplete elevated storage inventories.
The current rally follows a prolonged period of price suppression driven by strong production and mild weather. US working gas in storage stood at 2,443 billion cubic feet (Bcf) for the week ending 22 May, 18% above the five-year average for that date. This surplus had anchored prices below the $3.00 threshold for much of the spring. The last comparable weather-driven surge occurred in mid-July 2024, when a similar early-season heat dome in Texas propelled front-month futures from $2.65 to $3.95 over ten trading sessions. The macro backdrop features elevated industrial demand, with US liquefied natural gas (LNG) export terminals operating at 95% of nameplate capacity. The catalyst for the sudden move was the midday release of the European Centre for Medium-Range Weather Forecasts (ECMWF) model, which shifted to a hotter and drier outlook for the Central and Eastern US through late June, increasing projected cooling demand.
The July natural gas futures contract (NGN26) settled at $3.72/MMBtu, a gain of $0.485 from the prior day's settlement. Open interest increased by 12,000 contracts to 1.22 million, indicating new long positioning rather than short covering. The one-day 15% gain was the largest single-session percentage increase since a 19% spike on 5 March 2025 following a major Freeport LNG facility outage. The rally pushed the front-month contract 28% above its 50-day moving average of $2.91. Volatility, as measured by the CBOE/Nymex Natural Gas Volatility Index (OVX), surged 22 points to 78. By comparison, the S&P 500 Energy Sector (XLE) gained 1.8% on the session, while the broader S&P 500 (SPX) was flat. The price action created a significant backwardation in the futures curve, with the July contract trading at a $0.32 premium to the August contract, a structure that incentivizes immediate physical delivery.
| Metric | Prior Session (28 May) | Current Session (29 May) | Change |
|---|---|---|---|
| July Futures Price | $3.235/MMBtu | $3.720/MMBtu | +$0.485 |
| Daily Volume | 340,000 contracts | 512,000 contracts | +51% |
| Storage vs. 5-Yr Avg | +22% | +18% (est.) | -4 ppt |
The rally directly benefits North American natural gas producers with concentrated exposure to the Henry Hub pricing benchmark. Companies like EQT Corporation (EQT), the nation's largest producer, and Chesapeake Energy (CHK) see immediate cash flow improvements. For every $0.10 increase in the realized gas price, EQT's annualized EBITDA increases by approximately $180 million based on its production profile. Utility stocks with unhedged generation portfolios, such as Vistra Corp. (VST), also stand to gain from higher wholesale power prices driven by gas-fired generation. Conversely, industrial gas consumers in chemicals and manufacturing face rising input costs. CF Industries (CF), a major fertilizer producer, uses natural gas as both a feedstock and energy source; its margins compress as gas prices rise absent commensurate fertilizer price increases. A key risk to the bullish thesis is the potential for rapid production response. The US rig count dedicated to natural gas has remained steady at 115, and associated gas from prolific Permian oil wells could quickly bring new supply online. Positioning data from the Commodity Futures Trading Commission (CFTC) shows managed money funds had built a net short position of 80,000 contracts as of last Tuesday, suggesting the rally may have been amplified by a short squeeze.
The primary near-term catalyst is the US Energy Information Administration's (EIA) weekly storage report on 5 June. A print showing a draw below the five-year average injection could undermine the rally. Traders will monitor the 8 June release of the National Oceanic and Atmospheric Administration's (NOAA) updated summer outlook for confirmation of the heat forecast. The key technical level is the 200-day moving average, currently at $3.85, which served as resistance during the March rally. A sustained break above that level could target the December 2025 high of $4.15. Support is now established at the former resistance zone of $3.50, coinciding with the 10-day moving average. Should the hot weather pattern fail to materialize, prices could retrace to fill the gap on the daily chart created between $3.18 and $3.35.
Retail investors commonly access natural gas through exchange-traded products like the United States Natural Gas Fund (UNG), an ETF that tracks front-month futures. Direct futures trading on the New York Mercantile Exchange (NYMEX) requires a commodities brokerage account and carries significant use risk. Alternatively, investors can buy shares of major natural gas producers or midstream companies, though these are also influenced by firm-specific factors like production costs and pipeline access, not just commodity prices.
The correlation is strong but non-linear. Historically, the first major heat wave of the season triggers the most pronounced price spike, as it forces a rapid reassessment of storage trajectory. Analysis of the last decade shows that for every 10% increase in projected cooling degree days above normal for June and July, front-month natural gas futures have risen an average of 8%, all else being equal. However, the price response has diminished in years starting with exceptionally high storage levels, as seen in 2020.
LNG exports have become a structural price floor and key driver of volatility. The US now has liquefaction capacity exceeding 14 billion cubic feet per day (Bcf/d), creating a massive source of consistent demand. When global prices, particularly the Japan Korea Marker (JKM) in Asia, trade at a significant premium to Henry Hub, it incentivizes maximum export throughput, tightening the domestic supply balance. This linkage means US natural gas prices are increasingly sensitive to global weather events, geopolitical supply disruptions, and European gas storage levels.
Vortex HFT is our free MT4/MT5 Expert Advisor. Verified Myfxbook performance. No subscription. No fees. Trades 24/5.
Trade gold, silver & commodities — zero commission
Start TradingSponsored
Open a demo account in 30 seconds. No deposit required.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.