Commodities
Heat Wave Fueled Natural Gas Gains May Soon Lose Steam
Natural gas futures have been on a four-week winning streak, driven by strong late-summer cooling demand, tightening storage balances, and rejuvenated liquefied natural gas (LNG) feedgas flows.
The prompt month futures have benefited from these factors, but there are concerns that the current heatwave may soon wear off its welcome. The two-week models show record cooling degree days (CDDs), which could lead to a surplus in storage balances once winter approaches.
El Niño is also expected to weigh on the winter strip, as it typically leads to milder winters and reduced heating demand. This could potentially offset some of the gains seen in natural gas futures.