Texas Heat Wave Sends Natural Gas Futures Soaring

A heat wave is gripping Texas, with AccuWeather projecting Houston's average high temperatures from August 20-23 to hit 100F (38C), a full 5F above typical readings for that stretch.

This may not sound like much, but it can have a significant impact on air conditioners, which will run longer and strain the power grid over several days.

The result is a surge in electricity use across the state, driving up demand for natural gas. Natural gas futures have climbed as forecasters expect this heat wave to persist for several days.

Eli Rubin, an energy analyst at EBW Analytics Group, notes that wind power will likely drop just as the heat peaks, leaving gas to cover the difference and meet peak demand.