US Natural Gas Inventory Rise Sharply, Prices React as Summer Demand Approaches

The U.S. Energy Information Administration (EIA) reported a net increase of 104 billion cubic feet (Bcf) in natural gas inventory for the week ending May 2, 2025. This sharp build, in line with market expectations, has pushed total working gas in storage to 2,380 Bcf — approximately 25% higher than the same period last year and about 17% above the five-year average.

The inventory update, published in the EIA’s weekly Natural Gas Storage Report, comes amid a volatile energy market and signals a cautious buildup in anticipation of the upcoming summer demand spike, particularly for electricity used in cooling systems.

What the Numbers Mean

The addition of 104 Bcf is significant. It reflects a strong balance between domestic production and relatively mild spring demand — a time when natural gas usage typically declines before summer air conditioning demand begins. The figures show that the U.S. continues to maintain a healthy storage cushion, which is critical for managing seasonal swings in usage and pricing.

Natural gas in storage remains well above historical averages, easing fears of shortages, at least in the short term. However, market watchers are keeping a close eye on weather forecasts, LNG export volumes, and geopolitical factors that could quickly change the demand-supply equation.

Market Reactions and Price Movement

Following the EIA’s announcement, natural gas futures rose to their highest level in over a month, with prices briefly touching $2.40 per MMBtu. The price movement indicates that traders are factoring in expected increases in air-conditioning demand and potential liquefied natural gas (LNG) export growth.

Natural gas prices have remained under pressure for much of the year due to surging production levels, particularly from the Appalachian and Permian basins, and a relatively warm winter that kept heating demand subdued. However, prices are now rebounding as forecasts predict a hotter-than-normal summer, which typically leads to a spike in gas usage for power generation.

Factors Driving Inventory Build

Several factors contributed to the inventory build:

• Increased production: The U.S. continues to produce natural gas at near-record levels, with robust output from shale regions.
• Mild temperatures: A moderate spring has led to lower-than-normal residential demand, leaving more gas available for storage.
• Stable LNG exports: While LNG exports have remained steady, no major new terminals have come online in recent weeks, keeping more gas within domestic boundaries.
• Lower industrial use: Certain sectors are still seeing slower-than-expected recovery in gas usage, possibly due to broader economic uncertainty.

This combination of high supply and modest demand has allowed for strong inventory additions in recent weeks.

Outlook for Summer

The next few weeks will be critical in setting the tone for summer gas markets. Forecasts suggest a hot summer across large parts of the U.S., which would increase gas-fired electricity generation. If heatwaves arrive earlier than expected, inventory builds could slow, tightening the market.

Moreover, LNG exports are likely to rise as global demand picks up, particularly from Europe and Asia. This would reduce the amount of gas available for domestic storage and could put upward pressure on prices.

Despite the current surplus, analysts warn that market conditions could shift quickly. Any combination of weather volatility, pipeline outages, or geopolitical events could disrupt the supply-demand balance.

Analyst Commentary

Energy analysts note that while the current inventory situation is comfortable, it’s not a guarantee of low prices throughout the summer. “The market has a tendency to look forward. A few hot weeks, and we could see sharp price spikes,” said a commodity strategist at a major U.S. bank.

Others believe that the strong inventory position could buffer against extreme volatility, at least in the short term. “As long as production stays steady and weather is manageable, we’re well positioned going into summer,” noted an EIA spokesperson.

Conclusion

The latest EIA data showing a 104 Bcf increase in natural gas inventories highlights a well-supplied market heading into the summer season. While this should provide some price stability, changing weather patterns and export dynamics could shift the market quickly. Stakeholders — from utility companies to investors — are watching closely as natural gas once again takes center stage in the U.S. energy narrative.