The Nightcap for 8-7-25

NatGas w/ a Splash of Oil

Trading range: $3.03 to $3.14

The week has seen a rebound from a 3 ½ month low, driven by hotter and drier forecasts, supporting a short-covering rally after Monday’s price weakness from high production numbers and a lack of facing the inevitable increase in power demand.

The Storage Injection came in well below estimates at a paltry 7Bcf. A sure sign that fundamentals are tightening up.

Oil continues to fall but now due to hopes of peace coming in the Russia/Ukraine War. I’ll drink to that but won’t hold my breath.

LNG

U.S. LNG exports forecast for 2025 expected to average 14.6Bcf/D, up 2.7Bcf/D from the 2024 average, and up 1Bcf from earlier estimates made in 2024.

2026 estimated average is 16.4Bcf.  Today was 15.5Bcf. Where do you think LNG will average in 2026? My guess – more than 16.4Bcf/D.

Power

Expect continued price pressure in heat-stressed regions, especially those with large gas-fired generation shares and data center loads. We’re talking about you, TX.

CA, you’ll be there soon enough and when that happens, you think that poorly maintained and decrepit state grid will stand up to the additional strain and demand?

The Drivers

Persistent heat for Aug ’25 is the forecast. High production output and increasing rig counts limit price spikes. Tighter storage injections will bring upward price support. Record setting power demand will continue to increase and break records week after week.

Walking an even narrower tightrope going forward.

Today’s Specials

The EIA projects that overall US gas demand for summer ‘25 will average 98.7Bcf/D, up from last year, driven mainly by higher exports. Domestic consumption is expected to fall slightly as demand from power generation is expected to fall by 3% (thank you, Solar!) from last year but remain historically high.

Our Nightcap Beats Their Recap