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US Natural Gas Update: Futures Rally Over 3% as Persistent, Prolonged Heat Boosts Demand

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US natural gas futures surged over 3% on Wednesday as supportive weather conditions continued to bolster demand, outweighing strong domestic production.

The front-month Henry Hub contract and the continuous contract both rose by 3.46% to $2.872 per million British thermal units.

Gas demand remained elevated due to an intense and prolonged heatwave across the Southern and Western parts of the country, especially in states such as Texas, where higher temperatures have led to increased air-conditioning usage and gas-fired power demand, according to Trading Economics.

Weather forecasts, however, turned bearish in the near term, with the Western and Eastern parts of the country expected to see near- and below-normal temperatures from August 26 through September 01, according to the National Weather Service.

Meanwhile, average output across the Lower 48 states has reached 111.6 billion cubic feet per day in August, ahead of July's record 110.7 Bcf/d, helping cap the upside in gas prices.

Demand remained well above 2025 levels during this period, but market sentiment remained bearish due to strong supply growth and storage inventories, which were comfortably above the five-year average, according to NRG Energy.

LNG export feedgas flows were expected to dip to 17.60 Bcf/d on Wednesday, below the 30-day moving average of 17.99 Bcf/d, according to the Bloomberg LNG Feedgas Model.

This was primarily attributed to scheduled maintenance activities across LNG facilities, even as export demand remained robust.

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$KMI