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US Natural Gas Update: Futures Rally on Forecast for Above-Normal Heat Across US

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US natural gas futures rose on Wednesday, as above-normal temperatures continue to blanket the country, adding momentum to prices.

Both the front-month Henry Hub futures contract and the continuous contract edged higher by 1.88% to $2.919 per MMBtu.

Forecasts for the next 6 to 10 days, as well as the next 8 to 14 days, are expected to remain warmer-than-average, according to the National Weather Service, leading to increased space cooling demand and power burn.

Yet, natural gas demand is expected to soften on Wednesday, at 49 billion cubic feet per day, down from 51.2 Bcf/d on Tuesday, according to NRG Energy.

According to the Energy Buyer's Guide, this near-term heat is "insufficient to materially alter expectations" for gas-fired generation, while adding that the broadly mixed fundamentals should lead the market towards a path of least resistance, which is trading "sideways for natural gas futures."

Meanwhile, LNG export feedgas estimates remain under pressure, at 17.93 Bcf, compared to the 30-day moving average of 18.41 Bcf, according to the Bloomberg LNG Feedgas Model.

This comes as the Freeport LNG facility in Texas enters into planned maintenance, which is expected to last until late August.

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