Texas Heat Boosts Nat-Gas Prices Amid Adequate Supplies

Natural gas prices received a boost on Monday due to forecasts of record-high temperatures in West Texas, which are expected to drive up demand for electricity and consequently natural gas.

The Electric Reliability Council of Texas predicted that peak power demand this week could exceed the all-time record set in July, supporting nat-gas prices. However, updated US weather forecasts slightly reduced the chances of extreme heat in the US South and West, potentially reducing nat-gas demand from electricity providers to power air conditioning use.

As a result, natural gas prices fell from their best level on Monday after the revised forecasts were released. The Commodity Weather Group noted that above-average temperatures are still expected across Texas and the Southwest through September 7.