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US Natural Gas Update: Futures Continue to Rise on Warmer Weather Forecasts

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US natural gas prices rose in after-hours trading Tuesday as forecasts for above-average temperatures across parts of the country through the end of September pointed to firmer demand from power generators for air conditioning.

The front-month Henry Hub contract and the continuous contract each rose 1.66% to $2.933 per million British thermal units.

The Commodity Weather Group said Tuesday that above-average temperatures are expected across the South and Southeast through Sept. 29.

"Temperatures are still expected to trend lower overall as the calendar moves deeper into September, but the warmer forecast shift could slow the seasonal decline in power generation demand and temper the pace at which storage injections strengthen," Pinebrook Energy Advisors said.

Total US natural gas demand stood at 76.2 billion cubic feet per day on Tuesday, up 3.9% from a year earlier, Barchart said, citing BNEF data.

Longer-range weather revisions added heat across the South Central and Southeast, helping power burn remain firm at 45.5 Bcf/d before the seasonal decline accelerates, Gelber & Associates said.

Celsius Energy put power burn at 41.4 Bcf/d on Monday, up 2.9% from the same day a year earlier. The seven-day rolling average for the week ended Sept. 14 was 43.6 Bcf/d, up 5.5% from the comparable period last year, it said.

Consumption is still expected to decline in the second half of September as cooling demand fades, Gelber said, adding that Tuesday's advance reflects a narrower injection outlook without erasing broader shoulder-season pressure.

LNG feedgas demand was estimated at 18.8 Bcf/d, down 2.2% from a week earlier, but continues to provide a strong demand floor despite easing from last week's highs, Gelber said.

On the supply side, natural gas production remains strong after a brief slowdown, NRG said, topping 110 Bcf/d for two consecutive days over the past week.

Barchart reported Tuesday production at 111.7 Bcf/d, up 1.9% from the same period last year. Trading Economics said strong domestic production is capping further price gains, with Lower-48 output averaging more than 111 Bcf/d, up from 110.7 Bcf/d in July.

The stronger late-summer demand has tightened the near-term supply/demand balance, pulling projected fall inventories down closer to 3.8 trillion cubic feet and reducing some of the storage cushion that had weighed on October prices earlier this month.

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Commodities

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Commodities

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