Across the globe, unseasonably warm temperatures are influencing the natural gas market. This trend is being observed in various regions, affecting energy dynamics and consumption patterns.

Domestic Demand  

There has been a surge in demand across the U.S. due to the warmer than average summer we are experiencing. This heightened demand is largely attributed to the necessity of using natural gas for electricity generation to power cooling systems. Data S&P Global Commodity reveals that natural gas consumption for power generation has reached all-time levels averaging 44.6 billion cubic feet (Bcf) per day.

International Demand    

Despite sweltering heat waves and a slight uptick in European prices, the liquefied natural gas (LNG) market is anticipated to experience subdued activity as buyers and U.S. producers diligently try to predict future supply and demand.

When it comes to exporting natural gas to Mexico, there was a decrease of 2.6 percent or 0.2 billion cubic feet per day. Additionally, the amount of natural gas delivered to U.S. facilities for LNG exports was around 12.2 billion cubic feet per day.

Production & Supply  

Week by week, natural gas production in the United States has been slowly decreasing. Right now, the U.S. has 128 natural gas rigs in operation which is down 20 percent compared to last year. The aim behind this is to balance prices with production. However, it's worth mentioning that U.S. storage levels are still 11 percent higher than the five-year average.

As we approach late August and October keep in mind this is peak hurricane season.  On August 3rd, the National Oceanic and Atmospheric Administration (NOAA) updated their hurricane prediction to above average. Hurricanes have historically triggered upward shifts in natural gas prices due to potential damage to offshore production in the Gulf of Mexico.

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