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Strategies & Market Trends : Natural Resource Stocks
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From: roguedolphin6/18/2025 2:01:55 PM
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isopatch

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By the end of this week the AUG25 futures contract will be the front month. At the time of this post, it was trading for $4.016/MMBtu.

EBW Analytics: Bullish Momentum Lifts July Contract Ahead of Coming Heat Wave

The July natural gas contract rose to $3.851 yesterday—extending a three-session
increase to 35.9¢ (+10%). The structural shift into mid-summer is nearing with the next 7
10 days likely to feature daily record heat early next week and the return of Sabine Pass
LNG to full strength. Technicals suggest $4.00/MMBtu is possible near term.

With consensus expectations for this morning's EIA report running from 96-99 Bcf, the
storage surplus vs. five-year average may mark a short-term peak near 165 Bcf before
retreating into early July—likely furthering bullish momentum.

Still, Henry Hub spot prices were just $2.90/MMBtu yesterday and production readings
notched a June-to-date high. Momentum is clearly bullish, technicals point higher, and
near-term fundamental catalysts appear supportive. A near-term overshoot higher is
probable in our view, but it would not be surprising to see July relapse into final settlement
next week.
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MY TAKE: The "Paper Traders" that are long the JUL25 contract are probably tightening up their stop loss orders, so we may see a pull back in the price after tomorrow's storage report which will be a ~95 Bcf build for the week ending June 13. The builds for the last two weeks of June should be near the 5-year average. Then heat in July/August will cause the surplus to the 5-year average to decline. By the end of August you will understand why I believe the "Right Price" for U.S. natural gas is likely to be over $5.00/MMBtu in 2026. < EIA's NGas price forecast for 2026 is $4.90.

Dan Steffens
Energy Prospectus Group
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