U.S. Natural Gas Storage Builds by 101 Bcf as Futures Slip to $3.50/MMBtu

U.S. natural gas markets saw further softening this week as the Energy Information Administration (EIA) reported a notable injection of 101 billion cubic feet into underground storage for the week ending May 23, 2025. This pushed total gas in storage to 2,476 billion cubic feet, a level that sits 93 Bcf above the five-year average but still 316 Bcf below the same time last year.

Despite the larger-than-expected build, natural gas futures fell to $3.50 per MMBtu. The market continues to react to declining demand and weakening liquefied natural gas (LNG) feedgas volumes. So far in May, average daily feedgas deliveries to the eight major U.S. LNG export terminals have slipped to 15.1 billion cubic feet per day, down from April’s record 16.0 Bcf/d. The decline has been driven largely by maintenance-related slowdowns at key facilities, including Cameron, Corpus Christi, and Sabine Pass, with additional short-term outages at Freeport LNG further reducing volumes.

The outlook for June suggests more disruptions ahead, particularly at Sabine Pass, where further maintenance is scheduled. These supply chain bottlenecks are contributing to a buildup in domestic supply, capping any potential upside in near-term gas prices despite summer heating season demand.

On the production side, U.S. dry gas output has edged slightly lower in May, averaging around 105.0 Bcf/d. This modest decrease from April’s highs reflects ongoing spring maintenance across major pipeline systems, including work on Kinder Morgan’s Permian Highway Pipeline. While the reduction in output is marginal, it has not been enough to offset the decline in LNG exports, leaving storage levels poised to continue rising through early summer.

Weather trends offer a potential counterbalance. Forecasts now indicate warmer-than-normal conditions across much of the U.S. into mid-June. If those projections hold, natural gas demand for air conditioning and power generation may increase, potentially tightening the supply-demand balance heading into the peak of summer.

Still, the market remains cautious. Price action suggests that traders are prioritizing near-term oversupply concerns over the potential for a weather-driven rally. As a result, gas futures remain under pressure even as storage levels hover close to the five-year average.

For energy market participants, the current setup underscores the importance of monitoring both infrastructure availability and weather developments. With LNG maintenance curbing export demand and pipeline activity influencing regional flows, volatility is likely to persist well into June.

Coeus Energy continues to track these developments closely to provide timely, data-driven insight into the evolving natural gas landscape.