U.S. natural gas futures climbed about 3% on Tuesday on rising flows to liquefied natural gas (LNG) export plants and forecasts for record power demand in some parts of the country as homes and businesses crank up air conditioners to escape a brutal heat wave.
Front-month gas futures for August delivery on the New York Mercantile Exchange rose 10.2 cents, or 3.2%, to $3.283 per million British thermal units.
For the month, the front-month was down less than 1% in June after soaring about 19% in May.
Looking ahead, the premium of futures for August over September rose to a record high of around 7 cents per mmBtu.
High temperatures in New York, the nation’s biggest city, will reach 100 degrees Fahrenheit (37.8 degrees Celsius) on Thursday and Friday, according to weather forecaster AccuWeather. If correct, Thursday’s high would tie a record for that day set in 1966. The normal high for this time of year in the Big Apple is 84 F.
With extreme heat expected, PJM, the nation’s biggest electric grid covering parts of 13 states from New Jersey to Illinois, forecast demand on July 2 would reach 166.3 gigawatts (GW), which would top the current record of 165.6 GW in 2006.
SUPPLY AND DEMAND
Financial group LSEG said average gas output in the U.S. Lower 48 states rose to 110.0 billion cubic feet per day (bcfd) so far in June, up from 109.7 bcfd in May. That compares with a monthly record high of 110.6 bcfd in December 2025.
Analysts said mostly mild weather during the spring allowed energy firms to stockpile more gas than usual.
They projected the amount of gas in inventories would edge up to 5.9% above normal during the week ended June 26, up from 5.7% above in the previous week.
Meteorologists forecast the weather will remain mostly warmer than normal through July 15, which should boost the amount of gas power generators burn to keep air conditioners humming. About 40% of U.S. power generation comes from gas-fired plants.
LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 105.1 bcfd this week to 109.6 bcfd next week. The forecast for this week was lower than LSEG’s outlook on Monday, while its forecast for next week was higher. Average gas flows to the nine big U.S. LNG export plants rose from 17.1 bcfd in May to 17.4 bcfd so far in June with record feedgas to Cheniere Energy’s 3.9-bcfd Corpus Christi plant in service and under construction in Texas. That compares with a monthly record high of 18.8 bcfd in April.
(Reporting by Scott DiSavino; Editing by Emelia Sithole-Matarise)