Natural Gas Prices Hit One-Month High on Hot Weather and Modest Storage Build

Natural gas futures prices rose to $2.90/MMBtu on Thursday, their highest level in a month, as forecasts for hot weather continued to lift cooling demand expectations.

The price move ran directly into the storage report, which validated it. The Energy Information Administration (EIA) reported that working gas in storage totaled 3,184 Bcf as of Friday, August 21, a net increase of just 15 Bcf from the previous week.

This build came in roughly a third smaller than the 23 Bcf the market was projecting and below the 17 Bcf injected during the same week last year. The EIA's Weekly Natural Gas Storage Report released the figure at 10:30 a.m. ET.

The immediate driver of the price increase is heat that refuses to quit. Well-above-average temperatures are expected across the eastern two-thirds of the United States from August 31 through September 4, likely sustaining gas demand from power generators as air-conditioning use stays elevated.