U.S. Henry Hub natural gas (NATGAS) futures are up nearly 2% today following recent days of heavy selling. Yesterday, natural gas futures prices fell to their lowest level in nine months. Forecasts and a developing hurricane in the Atlantic could potentially cool temperatures even further, reducing electricity demand in the U.S. Estimates suggest that this August could be the coldest in the country in eight years.
Looking at U.S. weather forecasts, it appears unlikely that today’s modest rebound is driven by weather-related factors. Forecasts have not changed significantly in recent days. Temperatures along the U.S. East Coast remain mostly in line with or slightly below seasonal averages (except for Florida’s coast), while the outlook for the Midwest — although hot — is far from extreme.
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Create account Try a demo Download mobile app Download mobile appThis region of the U.S. is also less densely populated, meaning that the potential demand boost for air conditioning remains limited despite the high temperatures. According to NatGasWeather data, U.S. natural gas production has exceeded 3,100 billion cubic feet for months, indicating a healthy supply-demand balance. Today’s mild rebound appears to be driven more by technical factors than by fundamentals.
Source: CPC, NOAA
Source: NGI
Source: xStation5
