Nat-Gas Prices Rise with Warmer US Weather Forecasts
Natural gas prices rose slightly on Wednesday due to forecasts of warmer US weather, which could boost demand for electricity and air conditioning. The Commodity Weather Group reported that above-average temperatures are expected across the Western US through August 14.
The increase in nat-gas prices was limited by expectations of a larger-than-normal build in weekly storage. Thursday's weekly EIA nat-gas inventories are forecast to climb by +30 bcf for the week ended July 31, above the five-year average for the week of +23 bcf.
Nat-gas prices also face negative carryover from Energy Transfer's announcement that the Hugh Brinson pipeline will operate at its full capacity of 1.5 bcf/day by September 1, allowing more gas supplies to flow from the Permian Basin to the US benchmark Henry Hub in Erath, Louisiana.
The medium-term bearish factor for nat-gas prices is speculation about a powerful El Niño weather system bringing warmer-than-normal temperatures to the Northern Hemisphere this fall and winter, reducing nat-gas heating demand.