Hot Weather Fuels US Natural Gas Price Surge
US natural gas futures are on the rise as hotter weather forecasts indicate increased power demand from consumers using more air conditioning. The Electric Reliability Council of Texas (ERCOT) expects daily peak electricity demand to exceed the all-time record set in July, with temperatures remaining above average through at least September 4.
The heat has also pushed up day-ahead prices at the Waha gas hub in West Texas by reducing supplies available within the region. Prices at Waha have averaged more than $2 per million British thermal units so far this week.
However, increased gas flows from the Permian Basin into East Texas are putting downward pressure on prices at the US benchmark Henry Hub in southern Louisiana. Despite regional differences, the broader trend in the US gas market remains upward.