US natural gas prices rose above $2.71/MMBtu as forecasts signaled a prolonged and intense heatwave across the southern and western United States. Exceptionally high temperatures in Texas are boosting air-conditioning demand, driving up electricity consumption and putting additional strain on gas-fired power plants and the regional grid. In Houston, temperatures are expected to average around 100°F between August 20 and 23, and peak demand on the Texas power grid could reach a new record as wind generation declines.
Still, price gains have been capped by exceptionally robust domestic production. Average output in the Lower 48 states has climbed to 111.6 billion cubic feet per day in August, surpassing July’s record of 110.7 bcfd. Strong production, combined with relatively mild weather earlier in the year, has kept inventories above the five-year average since March. At the same time, gas flows to the nine major US LNG export facilities are averaging 17.2 bcfd in August, unchanged from July.
