SEATTLE (Oil Monster): The most recent report published by the U.S. Energy Information Administration (EIA) states that the natural gas price volatility has witnessed decline over the initial six-month period of 2025.
In H1 2025, the daily Henry Hub front-month futures price's average historical volatility showed a downward trend. By mid-2025, the quarterly volatility had dropped from 81% in Q4 2024 to 69%. This drop indicates more market stability and a return to more normal seasonal trends. It should be mentioned that since 2022, the natural gas markets have gone through a number of extremes, including both abnormally high and low inventory levels.
At the end of Q1 2025, the U.S. Lower 48 natural gas storage volumes were over 4% below the five-year average. The week ending January 24, 2025, had the fourth-largest weekly outflow from storage on record due to the increased natural gas use during the first month of the year. Consequently, on February 3 of this year, the 30-day historical volatility spiked up to 102%.
As weekly injections increased in 2Q25, the 30-day volatility decreased. Net injections into storage were very strong from late April to June. By the conclusion of 2Q25, natural gas storage inventories were 6% (173 Bcf) more than the previous five-year average, having started to rise the week of March 14.
