Total working gas in storage sits at 2,578 bcf. That is 138 bcf above the five-year average and only 3 bcf below year-ago levels. Comfortable but not loose. The surplus is there on paper but the direction of the builds tells a different story. Injections keep coming in below expectations and below the seasonal average.
The surplus shrinks fast if this pattern holds through cooling season. Storage at 138 bcf above average in early June does not stay there if builds keep missing and air conditioning demand pulls harder than expected through July and August. October is the number that matters and the trajectory right now points toward a tighter finish than the headline surplus suggests.
Production Stays High but Demand Keeps Pace
Lower-48 dry gas production averaged between 110 and 118 bcf per day in recent months. The Energy Information Administration expects full-year 2026 production to average about 118.9 bcf per day. Associated gas from oil drilling in the Permian Basin keeps pushing supply higher.
The difference between now and past years of oversupply is that demand is absorbing the production growth. Industrial consumption is steady. Power generation demand is climbing with temperatures. LNG exports are pulling record volumes off the domestic market. Production is not the problem. The market has barrels. It also has buyers and the buyers are keeping pace with the supply.
Record LNG Exports Support Domestic Prices
Feed gas to U.S. LNG terminals is running above 18 bcf per day. The Energy Information Administration forecasts LNG exports will average 17 bcf per day in 2026 with further growth expected in 2027 as new terminal capacity comes online.
Disruptions in the Middle East are driving the export demand higher. The Strait of Hormuz is still restricted. Qatar’s Ras Laffan facility is still running below capacity after earlier damage. Buyers in Europe and Asia are pulling more cargoes from U.S. terminals because the competing supply is not there.
Corpus Christi, Golden Pass, and other expansions are locking in additional export capacity for the next several years. Every bcf that ships overseas is a bcf that stays out of domestic storage. That pull on supply is not going away. It is growing and it puts a higher floor under July Nymex Natural Gas every time a new terminal ramps up.
What to Watch
Three straight below-average storage builds, heat arriving two weeks early, and LNG exports running above 18 bcf per day are all pointing in the same direction for July Nymex Natural Gas. The 138 bcf surplus above the five-year average looks like a cushion right now. By October that cushion could be gone if injections keep missing and summer cooling demand hits the way the models are projecting. The bears need the weather to break cooler or they need production to jump past 119 bcf per day. Neither one is happening right now.
Buyers have been bidding passively all week at the $3.387 to $3.396 zone but they have not chased through it yet. That is two straight weeks of passive bidding without a breakout. A sustained move above $3.396 opens the door to the resistance cluster at $3.619 to $3.642. Below $3.387 the tone weakens with support layered at $3.248, $3.187, and the 50-day moving average cluster at $3.133 to $3.145.
More Information in our Economic Calendar.
