Nat-Gas Prices Surge on Forecasts of Hot Temperatures

Natural gas prices surged on Tuesday as forecasts of above-average temperatures in the US South boosted demand from electricity providers to power increased air conditioning use.

The Commodity Weather Group said that temperatures are expected to remain high across the western and southern US through September 1, with the western US experiencing its hottest summer on record since 1895.

US natural gas production rose 2.5% year-over-year to 112.4 billion cubic feet per day (bcf/day), while demand increased by 3.2% y/y to 83.6 bcf/day, according to data from BNEF.

The US Energy Information Administration (EIA) projects that natural gas storage levels will swell to 3,985 bcf at the end of October, the highest level in 10 years and 5% above the five-year average.