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US Natural Gas Update: Futures Edge Up on Southern Heat Wave

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US natural gas futures made modest gains in after-hours trading on Tuesday as sentiment improved on forecasts indicating robust demand through mid-month.

The front-month Henry Hub contract and the continuous contract both climbed 1.11% to $2.281 per million British thermal units.

NatGasWeather.com forecasts "High" national demand over most of the next 15 days as a broad heat dome settles across the southern two-thirds of the US, bringing widespread highs in the 90s to low 100s degrees Fahrenheit, with temperatures reaching 111-115 degrees Fahrenheit across the Southwest deserts. Northern regions are expected to see more moderate temperatures.

Market volatility has diminished significantly this summer, with natural gas prices trading in a relatively narrow range since late May despite persistently warmer-than-normal weather, according to Energy Buyers Guide. While temperatures have remained elevated, prolonged periods of extreme heat have failed to materialize, limiting cooling-related demand.

"With key fundamental drivers pulling the market in opposite directions, the neutral bias that has defined recent price action is likely to hold until a major catalyst tips the scales," Energy Buyers Guide said.

On the supply side, BNEF data cited by Barchart showed Lower-48 US dry gas production was estimated at 110.2 billion cubic feet per day on Tuesday, up 0.4 Bcf/d from Monday and 1.7% higher than a year earlier.

Energy Buyers Guide said production has eased from highs of about 112 Bcf/d reached last month, with the decline appearing to reflect voluntary output reductions in the South Central region as producers respond to persistently weak prices in the Permian Basin.

The US Energy Information Administration on Tuesday raised its forecast for 2026 US dry natural gas production to 111.2 Bcf/d, up from its June estimate of 111.0 Bcf/d.

Demand, however, remained relatively subdued. Lower-48 gas consumption was estimated at 75.3 Bcf/d on Tuesday, down 1.6 Bcf/d from the previous day and 4.0% below the same period last year.

Celsius Energy estimated power-sector gas consumption, or power burn, at 42.3 Bcf on July 6, up 4.2 Bcf from the previous day and unchanged from the same day a year earlier. For the week ended July 6, average power burn was 40.8 Bcf/d, down 2.6 Bcf/d from a year earlier.

Meanwhile, estimated net gas flows to US LNG export terminals were 18.1 Bcf/d on Tuesday, down 1.1 Bcf/d from the previous day and 7.6% lower than the prior week.

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