Updated Aug 22, 2024
8/22/24
Weekly natural gas cash prices moved higher as hot weather in the West gave the country its first decent bout of the summer-like cooling demand. Futures, anticipating more sweltering heat in the weeks ahead, leapt higher.
Natural gas futures rallied anew on Monday against a backdrop of looming summer weather, lighter production and an improving storage situation.
Weekly natural gas cash prices pushed upward, supported by lower production activity and forecasts for intensifying heat. Those catalysts also bolstered futures.
Supplies of natural gas in storage are stout everywhere, but East region inventories are closer to historical norms than any other section of the Lower 48.
Weekly natural gas cash prices gained ground on the back of strong gains in West Texas in a week that was marked by stronger LNG feed gas flows and modestly higher weather-driven demand.
With excess storage inventories continuing to hang over the market through the shoulder season, natural gas forwards declined notably at the front of the curve for most regions during the April 18-24 trading period, data from NGI’s Forward Look show.
From Texas to both corners of the North, the National Weather Service (NWS) now expects above-average summer heat across the vast majority of the country this summer – a welcome development for natural gas bulls.
Natural gas futures lost ground Monday as production held strong and power burns eased following a weekend of regionally milder weather.
Natural gas futures lost momentum on Wednesday, despite intense near-term heat and lower production estimates. Coming off an 11.7-cent gain, the August Nymex gas futures contract shed 2.6 cents day/day and settled at $2.603/MMBtu. September fell 3.3 cents to $2.585.
Editor’s Note: This column is part of a regular series by industry veteran Brad Hitch for NGI’s LNG Insight dedicated to addressing the complexities of the global natural gas market.