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US Natural Gas Update: Futures Rise Amid Later Summer Heat Helping Offset Strong Output

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US natural gas futures were up on Tuesday as intense late-summer heat continued to provide support, helping offset strong output and ample inventories.

The front-month Henry Hub contract, as well as the continuous contract, both gained 1% to trade at $2.717 per million British thermal units.

Above-normal temperatures continued to blanket much of the country, boosting space-cooling needs and gas-fired power demand.

However, the heat is expected to ease, with temperatures across the East and Northeast forecast to fall to near- or below-normal from Aug. 25 through Aug. 31, according to the National Weather Service.

Meanwhile, gas output continued to average 108.8 billion cubic feet per day over the past seven days, while demand rose back above the 110 Bcf/d mark, "as heat invades the south and west," according to NRG Energy.

LNG export feedgas flows were expected at 17.83 Bcf/d for Tuesday, below the 30-day moving average of 17.99 Bcf, according to the Bloomberg LNG Feedgas Model. This was also 2.5 Bcf/d below the highs seen in Spring, as major facilities undergo maintenance.

Gas prices are expected to see support in the medium term, with forecasts of a Super El Nino expected to bring above-normal snowfall and potentially significant winter storms across the Central Plains, Midwest, East, Mid-Atlantic and parts of the Southeast, according to Severe-Weather EU.

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