Natural gas price in both the US and Europe have been rallying for about a week now; a relief to the bulls that lost control earlier in the month. In the US, weather remains a key bullish driver even with the additional injection of inventories.

Weather conditions
As is often the case, weather remains a key driver of US natural gas price. Indeed, it is one of the factors that has boosted and sustained the futures above the critical level of $6.00. This is a relief to the bulls who lost control of the market in early July. After plunging to a three-month low at $5.34 about a week ago, it has since rebounded to $6.55 as at the time of writing.
As highlighted by the National Weather Service, most of Western and Central US will continue to experience temperatures above normal. The southern Plains are also set to record highs of 90s and 100s into the weekend and the coming week.
Supply outlook
Even with the ongoing rebound, US natural gas price eased on its week-long rallying as data showed a further injection of inventories. Data released by the Energy Information Administration (EIA) on Thursday showed that the amount of gas in US storage facilities rose by 58 Billion cubic feet (Bcf) in the week ending on 8th July.
At the current level, the stocks are 252 Bcf lower than a similar period in 2021. While they were 319 Bcf below the 5-year average, the total working gas is within the 5-year historical range as shown in the chart below.

European natural gas price
As US natural gas futures bounce back above the critical level of $6, European gas prices are also holding steady above 175 euros per MWh. Investors remain concerned about what will happen once the maintenance of the crucial Nord Stream pipeline is complete.
Russian supplies by the state-owned Gazprom energy corporation via Ukraine and Nord Stream have been curbed in recent weeks. Seeing that the pipeline’s maintenance is set to end in the coming week, the market is keen on whether Russia will return the link immediately after. Notably, Germany has indicated that the eastern Europe country may not restart flows via the channel.