EIA reports that natural gas price volatility fell over 1H25

This decline marks a return to more typical seasonal patterns and reflects greater market stability as storage inventories return to levels close to the prior five-year average. Since 2022, natural gas markets have experienced a series of extremes, including both unusually high and low inventory levels, which contributed to elevated price volatility. Recent quarters, by contrast, have seen more seasonally consistent price movements, suggesting that natural gas market dynamics have steadied amid record storage injections and more balanced inventories.

Historical volatility measures daily price changes relative to average prices during a specific period in the past. This measure provides insight into market uncertainty by quantifying how much prices deviated from average levels. Changes in supply, demand, and inventories are reflected in price movements and volatility.

At the end of the 1Q25, US Lower 48 natural gas storage volumes were 4% lower than the five-year average. A polar vortex in January 2025 led to increased natural gas consumption, contributing to the fourth-largest weekly withdrawal from storage on record over the week ending 24 January 2025. The large withdrawals contributed to 30-day historical volatility increasing to 102% on 3 February 2025, the highest 30-day historical volatility since 8 March 2023. Natural gas inventories continued to decline through the week ending 7 March 2025, reaching a low of 1698 billion ft³.

The previous 30-day volatility eased in 2Q25 as weekly injections grew. From late April through June, net injections into storage were particularly robust, surpassing 100 billion ft³ per week the week of 25 April for the first time in 2025, according to the US EIA’s Weekly Natural Gas Storage Report. Net injections totalled more than 100 billion ft³ per week for seven consecutive weeks, the longest stretch since 2014. Natural gas storage inventories began increasing the week of 14 March, and by the end of 2Q25, inventories were 6% (173 billion ft³) above the previous five-year (2020 - 2024) average. The increased inventories and pace of the storage injections reduced concerns regarding supply availability, and price volatility declined.

Read the article online at: https://www.hydrocarbonengineering.com/special-reports/25072025/eia-reports-that-natural-gas-price-volatility-fell-over-1h25/