US Natural Gas Prices Hit Five-Week High on Late-Summer Demand

US natural gas prices have reached a five-week high, rising to around $2.91 per million British thermal units at the October Henry Hub futures market.

This increase is largely due to late-summer demand, as much of the US continues to run air conditioners and gas-fired power plants burn more fuel.

The liquefied natural gas (LNG) export channel also plays a significant role in this price surge. With higher shipments going overseas, domestic prices are lifted, especially since gas is still more expensive in Europe and Asia.

However, supply remains relatively high, with production in the Lower 48 running at around 111.5 billion cubic feet per day in August, and storage levels expected to be 3,218 billion cubic feet for the week ended August 28th, about 4.8% above the five-year average.

This comfortable inventory level reduces concerns about winter shortages, even with day-to-day price fluctuations due to weather headlines.