US Natural Gas Futures Rise on Higher Demand Forecasts
US natural gas futures have risen in response to forecasts of higher demand next week due to continued hot weather. According to financial firm LSEG, average gas output in the US Lower 48 states has reached a new record high of 111.3 billion cubic feet per day (bcfd) so far in August.
The high output and mild spring weather have allowed energy firms to maintain higher-than-average inventory levels since March, despite above-normal temperatures this summer. Gas inventories remain in surplus, with LSEG projecting a decline in average gas demand from 115.5 bcfd this week to 113.1 bcfd next week.
The US is the world's largest LNG exporter, with an average of 17.1 bcfd flowing to nine major export plants so far in August. Global gas prices have surged due to supply disruptions linked to Russia's invasion of Ukraine and the US-Israeli war with Iran, but the US has been able to maintain steady exports.
Power generators continue to burn significant volumes of gas to meet air conditioning demand, with 40% of US power generation coming from gas-fired plants. The recent severe storms in the Midwest have led to a decline in outages and potentially reduced gas burned for electricity production.