US natural gas futures rose above $2.95 per MMBtu, extending their rebound from a two-month low as forecasts for hotter weather strengthened expectations of higher cooling demand. Meteorologists project that temperatures will stay mostly above normal through August 7, likely increasing gas consumption by power generators as air conditioning use intensifies.
Upside momentum, however, was limited by robust supply. EIA data showed that gas inventories were 6.4% above the five-year seasonal average as of July 17. In addition, production in the Lower 48 states has averaged 110.4 bcfd so far in July, up from 110.0 bcfd in June.
LNG export demand has also softened, with gas flows to major export terminals averaging 17.4 bcfd so far this month, slightly below June’s pace, in part due to scheduled maintenance at Freeport LNG’s facility in Texas. Meanwhile, traders are closely watching Tropical Storm Bertha, which has the potential to disrupt LNG export operations along the US Gulf Coast.
