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US Natural Gas Update: Futures Reverse Earlier Losses as Heat Dome Boosts Demand Outlook

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US natural gas futures reversed an earlier decline to rise in midday trading Wednesday as an intense heat dome moved eastward from the center of the country, lifting expectations for stronger near-term cooling demand and power consumption.

The front-month Henry Hub contract and the continuous natural gas futures contract each gained 0.48%, trading at $2.918 per million British thermal units.

The heat dome, which shattered temperature records across the West over the weekend, is forecast to bring extreme heat to parts of the central and eastern US.

Earlier in the week, Salt Lake City, Utah, and Billings, Montana, recorded all-time highs of 109 and 111 degrees Fahrenheit, respectively.

The National Weather Service said Wednesday that temperatures of 95 to 105 degrees Fahrenheit are expected to be widespread across the East.

The agency warned that "even for mid-July, this heat is expected to be exceptionally rare for some locations and produce numerous daily temperature records, while potentially nearing monthly and all-time records."

New York City temperatures are expected to peak around 98 degrees Fahrenheit on Wednesday.

NRG said the heatwave is expected to steadily increase cooling demand and power consumption throughout the week.

Total US natural gas demand is forecast to rise on Wednesday to 110.9 billion cubic feet per day, supported by a 0.4 Bcf/d increase in gas-fired power generation demand.

At the same time, natural gas production fell 0.3 Bcf/d from the previous day but remained elevated at 107.7 Bcf/d.

Despite stronger weather-driven demand, high production levels and lower LNG feedgas demand due to ongoing maintenance at Freeport LNG continue to weigh on prices.

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