Natural Gas Prices Rise 7% on Forecasts of Extreme Summer Heat

Natural gas prices have surged by 7%, reaching a five-month high amid forecasts of extreme heat affecting large areas of the U.S. this summer. Prices are currently at $3.129 per million British thermal units on the New York Mercantile Exchange, marking the highest point since January 12 of this year.

This increase follows a forecast from the U.S. National Weather Service, predicting hotter-than-normal temperatures across most of the country over the next six to 14 days. The Southwest and California are already experiencing record-high temperatures.

According to a statement from the National Weather Service on social media, “Dangerously hot temperatures will return to the southwestern U.S. and central valley of California Tuesday and Wednesday, then spread across the southern and eastern U.S. later this week. Excessive heat is also possible on Tuesday in coastal Puerto Rico and the U.S. Virgin Islands.”

Analysts suggest that the above-average temperatures will likely boost demand for cooling throughout the nation, contributing to an increase in natural gas demand. Earlier this year, prices for natural gas had dropped significantly due to warmer winter weather reducing heating demands in both North America and Europe.

Additionally, the United Nations has projected that 2024 could potentially be the hottest year on record.