Summer Heat Boosts Natural Gas Prices Amid Ample Supply
Natural gas prices have risen in recent days as traders weigh expectations of persistent summer heat against concerns over ample supply. The commodity settled 0.6% higher at 266.4, a gain that reflects increased demand for power generation amidst warmer-than-normal temperatures forecast through September 3.
The latest EIA report showed U.S. utilities adding only 16 billion cubic feet of gas to storage in the week ended August 14, below the market expectation of 19 bcf and lower than the five-year average of 29 bcf. However, inventories rose to 3.169 trillion cubic feet, 0.9% below the corresponding period last year but 6.2% above the five-year average.
The EIA expects U.S. natural gas production to rise from a record 107.6 bcfd in 2025 to 111.2 bcfd in 2026 and 116.0 bcfd in 2027, while domestic consumption is projected to increase from 91.9 bcfd in 2025 to 92.0 bcfd in 2026 and 94.8 bcfd in 2027.
Technically, the market appears to be under short covering, with open interest declining 22.19% to 17,269 while prices increased ₹1.6. Natural gas has support at 260.7, followed by 255.0, while resistance is placed at 271.8.