Natural gas prices skyrocket as heat wave hits large parts of the United States

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Natural gas prices rose nearly 9% on Friday, even as the weekly storage report showed little movement.

Natural gas prices hit $ 2.367 at 2:26 p.m. EDT, an increase of 8.48% or $ 0.185, even as the EIA’s weekly storage report a day earlier showed a slight increase of 58 Bcf working gas in stock. The market had anticipated a larger build.

Warm weather forecasts and reports of increased LNG exports were also bullish for natural gas on Friday.

First-month natural gas futures hit their highest level since the end of last year on this data on Friday as air conditioning use is expected to rise as people try to cope with the heat wave. This will increase the demand for natural gas.

This will be especially true in Texas, where demand for electricity in general – and therefore natural gas – is expected to hit an all-time high today as the heatwave sets in, according to Reuters.

These record highs in electricity demand will come even as industrial activity has not yet returned to pre-pandemic levels.

This unprecedented demand for electricity has led to increases in electricity prices in the western United States, which in turn has pushed up natural gas prices.

The first month’s natural gas futures rose more than $ 0.15 to $ 2.335 on Friday afternoon.

LNG exports have also increased, with demand prospects improving over the coming weeks, although the EIA said U.S. LNG exports will remain at low levels for the remainder of the summer, with expected shipments of LNG is still being canceled. According to EIA data cited by Kallinish, 46 LNG shipments were canceled in June, 50 in July, 45 in August and so far 30 in September.

By Julianne Geiger for OilUSD

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