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US Natural Gas Update: Futures Rise Amid Bullish Weather Forecasts, Sluggish Output

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US natural gas futures were up on Tuesday, as weather forecasts point toward above-normal temperatures across most of the country, leading to higher power burn for cooling needs, which comes alongside slipping output.

The front-month Henry Hub contract and the continuous contract each rose 1.62% to settle at $3.073 per million British thermal units.

This comes as almost the whole country is expected to see above-normal temperatures from May 26 to June 1, according to the National Weather Service, leading to increased use of air conditioners, higher power consumption, and thus, greater demand for gas from the power sector.

These conditions are already lending support to the market, with Gary Cunningham of Tradition Energy noting that prices in the PJM region had spiked twice on Monday alone, while others such as New England markets behaved erratically.

Power generation demand was 40 billion cubic feet on Monday, Pinebrook Energy Advisors noted, which was the "highest level so far in the early stages of the cooling season."

Meanwhile, output has continued to slip, with some companies such as EQT (EQT) cutting production in response to low spot prices, according to TradingEconomics.

US LNG Feedgas flows are expected to hit a new low on Tuesday, at 15.59 Bcf, compared to 17.22 Bcf on Monday, and the 30-day moving average of 18.41 Bcf, according to the Bloomberg LNG Feedgas Model. This has been attributed to seasonal maintenance across key LNG facilities.

Price: $58.29, Change: $+0.83, Percent Change: +1.45%

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