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US Natural Gas Update: Futures Rise as Late-Summer Heat Lifts Demand Outlook

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US natural gas futures pared earlier gains in midday trade on Friday as forecasts pointed to late-summer heat in the coming weeks, boosting expectations for gas-fired power demand.

The front-month Henry Hub contract and the continuous contract were both up 0.81% at $2.747 per million British thermal units.

Prices rose as forecasts called for hotter weather across much of the US. NatGasWeather.com said most of the US will be hotter than normal next week and forecast "strong" to "very strong" national demand over the next seven days.

Bloomberg, citing Commodity Weather Group, also reported that forecasts had trended hotter, with above-average temperatures expected across the South through the end of August.

Gelber & Associates said demand from the residential/commercial and industrial sectors is expected to rise from roughly 80 billion cubic feet per day currently to between 82 Bcf/d and 84 Bcf/d during the Aug. 17-20 heat window.

However, Friday's gains were capped by rising production across Texas, the Northeast and the Rocky Mountains. Trading Economics said its data showed US natural gas production averaging a record 111.2 Bcf/d so far in August, up from 110.7 Bcf/d in June.

Bloomberg reported estimated gas flows to LNG export terminals on Friday were around 18.1 Bcf/d.

G&A said LNG feedgas demand is forecast at around 19.9 Bcf/d on Saturday and above 20 Bcf/d through much of the two-week outlook, although scheduled pipeline maintenance at Corpus Christi could briefly interrupt that ramp-up next week.

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