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US Natural Gas Update: Futures Rally Amid Bullish Near-Term Weather Forecasts

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US natural gas futures were rallying on Tuesday amid forecasts of warmer-than-expected temperatures across large swathes of the country, fueling near-term bullish momentum.

Both the front-month Henry Hub contract and the continuous contract were up 2.70% to $3.267 per million British thermal units.

Almost the entire country is set to experience above-normal temperatures from July 07 to July 13, according to the National Weather Service, leading to increased demand for space cooling and gas-fired power consumption.

According to the Energy Buyer's Guide, there is potential for "record summer generation demand if the heat verifies as expected," even though the markets continue to expect moderation over the next five days. They warned, saying that "a hotter or longer-lasting pattern could quickly change the sentiment."

Power burn is already up by 1.0 billion cubic feet per day, while output is down 1.1 Bcf/d, according to NRG Energy, adding to the bullish momentum.

Meanwhile, LNG feedgas flows are expected to remain strong, at 19.66 Bcf/d, according to the Bloomberg LNG Feedgas Model, as major facilities come back online after undergoing spring maintenance in recent weeks.

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