US Natural Gas Prices Soar Amid Record Heat and Slumping Output
US natural gas prices surged on August 24, driven by record-breaking heat and decreased output. Forecasts indicate that this month is shaping up to be the hottest population-weighted August on record, according to the Commodity Weather Group.
The group's analysis suggests that consumers are ramping up their air-conditioning use, driving demand for power-plant fuel. As a result, natural gas prices have increased, extending gains from the previous session.
Appalachian production region output fell over the weekend, due to uneconomic prices for short-term delivery. The Tetco M-2 Receipts index, which tracks Appalachia gas prices, plummeted 50% from June and July levels to $1.61 per million British thermal units on Friday.
The increased demand and decreased supply have combined to drive up natural gas prices, with no end in sight for the hot weather.