Updated Aug 30, 2024
8/30/24
Baseload natural gas prices advanced during the first day of July bidweek trading on Monday, supported by intense heat taking grip across the Lower 48, with forecasts pointing to more of the same in July.
With U.S. natural gas production returning and temperatures climbing, the natural gas futures market continued to vacillate Monday between gains and losses in early trading.
A sustained heat wave over India since mid-spring has created a surge in natural gas-fired power generation, pushing LNG imports in May to the highest level in almost four years.
July Nymex natural gas futures were lower early Monday as rising production and falling LNG feed gas demand outweighed the impact of extremely hot weather.
The market in early trading Friday appeared to be focused on the bearish leanings from revisions in the latest storage data and revised weather forecasts, including a cooler change in the second half of June, dragging prompt-month natural gas futures lower.
Impressive heat in the forecast for the second half of June sparked a rally in the natural gas forwards markets from June 6-12, with double-digit gains spread across most of the Lower 48, according to NGI’s Forward Look.
Drops in natural gas production, declining storage surpluses and stronger summer weather demand in the Lower 48 and abroad all line up in bulls’ favor. These factors could prop up prices through the cooling season and potentially longer, a cadre of analysts agreed this week.
Following a seesaw session to open the workweek, natural gas futures surged overnight Tuesday as the market returned focus to the extreme hot weather slated to spread across the country.
Upward price action gave way to a retreat in natural gas futures markets as of midday trading Monday, with prices see-sawing despite hotter weather expanding through the back half of June and into July.
Natural gas inventories in the East remain elevated following a mild winter. But prices have started to pop in parts of the region amid bursts of early season cooling demand and expectations for more to come.