FINWIRES · TerminalLIVE
FINWIRES

US Natural Gas Update: Futures Rise as Weather Forecasts Shift Warmer

By

US natural gas futures rose in midday trade on Wednesday as weather forecasters expect increased cooling demand across large swaths of the US as temperatures rise into June.

The front-month Henry Hub contract and the continuous contract both gained 2.24%, trading at $3.238 per million British thermal units.

Forecasts indicate warmer-than-average temperatures in the northern half of the US through the end of the week, while above-average temperatures become concentrated in the central part of the country next week, NRG said.

Trading Economics said mostly above-normal temperatures are expected through June 17, which is expected to boost gas consumption from power generators as air-conditioning use rises.

The 1-15 day outlook added 5.6 degrees to the Lower 48 forecast, keeping the demand setup pointed more firmly toward cooling-season strength, and power burn remains the clearest bullish demand driver as the market looks into mid-June, Gelber & Associates said.

US production is expected to rise to just over the May average of 107.5 billion cubic feet per day, NRG said. Trading Economics said its data showed gas production in the Lower 48 states averaged 108.8 Bcf/d so far in June, down from 109.7 Bcf/d in May.

NRG said it expects the US Energy Information Administration to report a 99 Bcf storage injection on Thursday for the week ended May 29. That would be below the five-year average build of 101 Bcf. Inventories are already about 6% higher than historical levels at this time of year.

On the export side, LNG export feedgas is forecasted to strengthen to 16.5 Bcf/d after falling below 16 Bcf/d yesterday, NRG said.

Trading Economics said average feedgas flows to major LNG export facilities declined from 17.1 Bcf/d in May to 16.0 Bcf/d in early June due to seasonal maintenance at several plants, with daily flows falling to a four-month low.

Despite scheduled maintenance, US LNG exports fell only slightly to 33.8 metric tons in May from 33.99 mt in April, Reuters reported on Tuesday.

Cargoes to Asia rose 2.71 mt, or 36%, to a one-year high at 3.68 mt in May, driven by JKM's premium over TTF, according to Reuters data. JKM averaged $17.75/MMBtu versus TTF's $16.11 per megawatt-hour. Europe still received 5.13 mt, or 51% of US May exports, down from 6.14 mt in April.

Related Articles

Commodities

US Ethanol Stakeholders Should Focus Demand Expansion into Maritime Shipping, SAF, Skor Says

The US ethanol industry should leverage its 2026 policy wins to expand the E15 retail footprint, grow exports, and build demand for ethanol across new sectors such as maritime shipping and sustainable aviation fuel, Growth Energy CEO Emily Skor said Wednesday.Skor made the remarks while addressing industry stakeholders at the annual Fuel Ethanol Workshop in St. Louis.She said that a bill to permanently allow the year-round, nationwide sale of E15 had passed the House on a strong, bipartisan vote, and that the industry should remain active to secure passage in the Senate."The chairman of the Senate Agriculture Committee, John Boozman, recently said that he believes it has enough support to pass the Senate. But floor time in the Senate is a scarce resource," Skor said.In 2026, summer waivers for retailers to sell E15 were secured, the largest-ever renewable volume obligations under the Renewable Fuel Standard were locked in, and the 45Z tax credit was passed.Additionally, Skor noted in her speech that E15 is finally legal in all 50 states."We now have two state standards, including Iowa's E15 access standard that took effect in January. States are continuing to invest in infrastructure grants, with millions more dollars going out the door in Iowa and Minnesota. Also, three new states have created E15 tax incentives in just the last two years," Skor said.Skor said that now is the time for the industry to expand into air travel, maritime shipping, and heavy equipment engines.Currently, marine fuel is an 85-billion-gallon global market. By 2030, over 1,000 seagoing vessels will be ethanol capable."That alone will represent 6.4 billion gallons of potential ethanol demand," Skor said.

Commodities

EMEA Natural Gas Update: Futures Jump on Fresh Middle East Military Action amid Stalled Peace Talks

European natural gas futures extended gains in after-hours trade on Wednesday, as renewed military escalation in the Middle East added fresh uncertainty to already fragile diplomatic efforts.The Dutch TTF front-month contract rose 3.987% to 49.505 euros ($57.41) per megawatt-hour, while the UK NBP front-month contract gained 4.835% to 120.34 British pence ($1.61) per therm.US forces intercepted multiple Iranian ballistic missiles and one-way attack drones and conducted self-defense strikes on Qeshm Island in response to Iranian attacks across the Middle East, US Central Command said in a late-Tuesday social media post.It said Iran launched two missiles toward Kuwait and three at Bahrain, but none hit their targets either because they fell short, broke apart in flight, or were intercepted by US and Bahraini air defense forces.CENTCOM also said it shot down three Iranian one-way attack drones targeting civilian vessels transiting the Strait of Hormuz and carried out "self-defense strikes" against an Iranian military ground control station on Qeshm Island.Iran's actions come in response to continued Israeli attacks in Lebanon. Despite the escalation in hostilities and Iran's claims that negotiations were suspended, US officials maintain that talks with Tehran are still ongoing.However, "The lack of meaningful progress toward a resolution has fueled concerns that disruptions to energy flows from the Persian Gulf could persist, raising fears over Europe's ability to replenish gas inventories ahead of winter," Trading Economics said.Demand expectations for natural gas are also rising heading into summer. Atmospheric G2 said in a Wednesday social media post that it expects late June through July to bring hot, dry, sunny conditions across Europe, increasing stress on rivers and water systems. It added that any additional heatwaves could significantly lift electricity demand for cooling.Gas Infrastructure Europe reported Tuesday that EU gas inventories were filled to just 40.76% of capacity, compared with nearly 50% a year earlier.Daniel Hynes said stable but elevated LNG prices are likely to pressure European buyers as they struggle to rebuild storage levels while competing with Asian demand for cargoes. He added that supply conditions in Asia are set to tighten further as workers at Inpex Corporation's Ichthys LNG export project began strike action after talks with the union stalled. The facility accounts for roughly 2% of global LNG output, exporting about 9.3 million tonnes per year, Hynes said.

Commodities

Atlas Energy Sees Strong Sand Demand, Advances Power Strategy, RBC Says

Atlas Energy Solutions (AESI) has made meaningful progress in its power generation strategy and sees improving conditions across its proppant and logistics businesses, RBC Capital Markets said in a Tuesday note.The company is targeting about 2 gigawatt of power generation deployments by 2030, supported by a 1.4-GW Caterpillar framework agreement, 240 megawatt of prior equipment orders and existing Moser capacity.Atlas expects to deploy more than 550 MW of power assets in H1 of 2027, followed by about 500 MW in each of 2028 and 2029, while its power opportunity pipeline has expanded to about 4 GW, including data center projects.The company recently signed a 120 MW power purchase agreement with a five-year term and two five-year extension options, which could generate about $50 million to $55 million of annualized adjusted free cash flow when fully deployed.RBC noted that securing long-term power contracts would support a more stable and predictable cash flow profile.Atlas said sand volumes, also known as proppant, are effectively sold out for Q2 of 2026 and expects strong demand through the rest of the year, although average realized prices are expected to remain below $18 per metric ton as the market remains well supplied.Management expects operating costs to decline to about $12.75/mt and improve further through 2026 as new Twinkle dredges enter service at the Kermit mine, increasing production efficiency and fixed-cost absorption.Logistics margins should improve sequentially, supported by higher Dune Express utilization and stronger trucking rates, with the firm forecasting logistics margins of about 13% in 2026.RBC maintained a $20 price target based on a sum-of-the-parts valuation, implying roughly 9.5x 2027 EBITDA of $355 million.RBC maintained its Sector Perform rating on Atlas Energy Solutions.Price: $18.34, Change: $+0.30, Percent Change: +1.66%

$AESI