Natural gas futures climbed higher Wednesday to a 31-month high on new weather models forecasting hotter temperatures over the next two weeks.
Front-month gas futures NGc1 ramped more than 3.5% Wednesday morning to $4.17 per million British thermal units (mmBtu). Earlier in the session, prices tagged $4.19 mmBtu, which were the highest since December 2018.
According to data provider Refinitiv, US temperatures are expected to begin rising next Monday, and another heat wave could hit the Pacific Northwest.
Refinitiv projected average gas demand, including exports, would rise from 90.9 bcfd this week to 94.5 bcfd next week as power generators burn more of the fuel to meet rising air conditioning use. The forecast for next week, however, was lower than Refinitiv predicted on Tuesday as high gas prices prompt some power generators to burn coal instead of gas.
The daily temperature anomaly chart shows warmer weather arrives on Monday.
Cooling degree days suggest as temperatures rise next week, Americans will be forced to turn down their thermostats.
Much of the US has had a cooler than average first week of August, but all that seems to be changing early next week.
