U.S. natural gas futures settled higher on July 29, 2026, snapping a four-session losing streak as the August contract expired on the New York Mercantile Exchange. Prices were steady in early trading before settling up on the session, according to WSJ.

Futures are contracts to buy or sell gas at a set price on a future date. The August contract was the one traders were watching most closely, and its expiration caused a flurry of activity. On July 16, gas fell 6.6 cents, or 2.3%, to $2.888 per million British thermal units — the standard measure for gas pricing (Reuters). Earlier in the summer, prices settled at $2.871 on June 12 after giving up early gains (WSJ). Back on June 10, prices had risen about 1% on forecasts for hotter weather and stronger demand (Reuters.

Natural gas is stored underground in large quantities so it's available when demand spikes — mainly in winter for heating. As of Friday, July 24, 2026, storage stood at 3,084 billion cubic feet, up 28 billion from the prior week, per EIA estimates (EIA). The week before saw a build of 32 billion cubic feet, which landed at the low end of what analysts expected (WSJ). When storage fills up slower than expected, the safety cushion shrinks heading into winter, even if production is rising.

On the supply side, U.S. gas production rose year over year for the 14th straight month in May 2026, according to EIA's Natural Gas Monthly (EIA). Steady production growth has kept a lid on prices even when weather or exports spike demand. Earlier this year, the EIA's Natural Gas Weekly Update tied price strength to expected storage changes, with prices above $4.00 at the time (EIA). Prices have since fallen well below that, settling in the high-$2 range through July.

The EIA's Short-Term Energy Outlook forecasts total U.S. gas consumption rising 2% in 2026 and another 4% in 2027, reaching 38.1 billion cubic feet per day (EIA). From 2025 to 2027, consumption is projected to grow by 3.1 billion cubic feet per day, with the electric power sector driving most of that increase as utilities burn more gas instead of coal and air conditioning load rises. The forecast also sees gas prices averaging close to $3.70 per unit over that period (EIA).

The broader context here is a clear disagreement between the market and the government's forecast. Futures prices in the $2.80s sit well below the EIA's forecast average near $3.70. Either the market believes there's a lot more supply than the forecast accounts for, or the forecast is too optimistic about demand. The 14-month production streak supports the supply-side argument, but the low storage builds suggest the surplus may be shrinking faster than production alone would suggest.

The expiration of the August contract also shifts attention. Summer weather premiums fade, and traders now look to September — a quieter period before winter heating demand returns. The four-session losing streak before the expiration-day gain suggests traders were already positioning cautiously, and the bounce likely reflects short-covering, where traders who bet against gas prices buy contracts back to close their positions, rather than a real change in demand.

The next storage report will show whether the below-expected fill pattern continues or returns to normal. With storage at 3,084 billion cubic feet and the injection season nearing its end, each weekly report carries extra weight for winter pricing.