Hot Weather Forecasts Boost US Natural Gas Prices
Natural gas prices rose sharply as forecasts predicted above-average temperatures in the southern and western United States through September, increasing demand for electricity generation to power air conditioning. The Commodity Weather Group noted a shift toward hotter conditions, which is expected to drive up natural gas consumption by utilities. Despite rising production levels—reaching 112.4 bcf/day—and increased LNG exports of 17.8 bcf/day, bearish factors include the EIA's projection that US storage will reach record highs and a potential El Niño weather pattern reducing heating demand in winter months. However, recent electricity output growth has provided some support for gas prices. Market participants are also monitoring supply-side developments such as Energy Transfer’s Hugh Brinson pipeline reaching full capacity by September 1, which could further increase domestic supplies.
Tickers: $ET