Anticipation Builds over Potential Summer Surge in U.S. Natural Gas Futures Market?
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I dug deep into the $3.644 per MMBtu natural gas prices conundrum back in May 2025, penning an article on our website. Here's the lowdown:
- The inventory levels, rig count increases, expanded LNG demand, and summer slope in prices suggest the natural gas prices will stay high for the foreseeable future. The peak demand season occurs from late Q3 to Q4, where prices usually hit annual highs. Given the bullish trend, it'd be wise to stock up on dips with tight stops if you're a natural gas fan.*
Fancy some actionable insights? As of June 20, 2025, nearby natural gas futures had skyrocketed to the $4 range from a mere $3.644 per MMBtu on May 12, 2025.
Let's Dive into That Bullish Bias in 2025
U.S. natural gas futures are riding the bullish wave in 2025.
- The daily chart of NYMEX natural gas futures, pinpointed for August delivery at the Henry Hub, shows the bullish pattern since plummeting to a $3.394 per MMBtu low on April 24, 2025. The futures managed to hold on to the $4 range as of June 20, 2025.*
The Longer View: A Hike up the Price Ladder
The bigger picture reveals a longer-standing bullish trend.
- The monthly chart indicates that natural gas futures have been trekking uphill since dipping to a $1.60 low in February 2024. The highest continuous contract high reached $9.987 per MMBtu in August 2024, the priciest peak since July 2008 – a whopping 428.5% increase!*
When the Mercury Rises, So Do Demand Levels
With the withdrawal season over in March 2025, natural gas prices generally hit their zenith during winter months; however, worry not, the shoulder season isn't all sunshine and roses. When summer roars in, demand rebounds for cooling.
- To put it bluntly:
- Inventories as of June 13, 2025, stood at an impressive 2.802 trillion cubic feet – 6.1% above the five-year average, yet 7.7% lower than the same time last year.
- Higher-than-usual inventories support prices hovering around $4 per MMBtu, but there's more fuel for further price hikes.*
LNG and the Middle East: A Freight Train Loaded with Tension
The world's leading natural gas-producing countries consist of:
- Despite leading the world in natural gas production, the United States is vulnerable to supply disruptions caused by events like the escalating conflict between Iran and Israel in late June 2025. War in the region raises concerns about Iran's oil and gas infrastructure and increases apprehensions about the stability of the LNG market, potentially intensifying global supply woes and nudging U.S. prices higher.*
Get Ready to Rumble with BOIL
The best way to stage a risk position in the unpredictable U.S. natural gas market is by trading futures and options contracts through the CME's NYMEX division. Keep in mind – futures are wildly volatile, and the potential for price variance is considerable due to the increased margin involved.
- The UNG ETF does a fantastic job mirroring U.S. natural gas futures on a temporary basis. For example, the latest rally in August natural gas futures led to a 18.7% rise from $3.563 on June 11, 2025, to $4.230 per MMBtu on June 20, 2025. UNG, in turn, climbed 15.4% from $15.70 to $18.12 per share during the same period.*
The BOIL ETF, meanwhile, amps up the action. From June 11, 2025, to June 18, 2025, BOIL rocketed up 30.7% from $48.73 to $63.68 per share. While BOIL manages $280 million in assets, it trades on average over 2.86 million shares daily and slaps a 0.95% management fee.
Remember, those who aren't keen on the bullish route can always hop on the KOLD ETF, enabling participants to take positions on the bearish side of the U.S. natural gas market.
With natural gas futures heading into the U.S.'s peak cooling season, supply concerns related to worldwide LNG supplies continue to mount due to ongoing conflicts in the Middle East. Natural gas prices could soar to heights unseen since 2008 if the price trend endures. At nearly $4 in late June 2025, natural gas prices could enjoy substantial upside potential in the weeks and months to come.
Be cautious when playing with leveraged products like BOIL and KOLD ETFs, and always keep tabs on risk-reward dynamics. Implementing proper stop orders is crucial to protect your capital if prices don't perform as anticipated or remain stable. Time decay can erode BOIL and KOLD's performance, as these ETFs rely on swaps and options to generate leverage. Additionally, bear in mind that while natural gas futures trade around the clock, UNG, BOIL, and KOLD are only accessible during regular trading hours.
Here's to the potential summer rally on the horizon in the natural gas futures market, which could yield bountiful benefits for savvy traders!
1. The high demand for natural gas in various sectors, such as electricity generation and cooling systems during summer, makes sports facilities that use natural gas as their primary energy source potentially impacted by fluctuations in natural gas prices.2. With the natural gas market exhibiting a strong bullish trend, sports enthusiasts and facilities managers might consider incorporating energy management strategies to mitigate the effects of potentially rising energy costs, ensuring smooth operations and budget predictability.
