Bolstered by continued expectations for robust July cooling demand, natural gas futures advanced in early trading Wednesday. Heading into its first session as the prompt month, the August Nymex contract was up 13.0 cents to $6.700/MMBtu at around 8:50 a.m. ET.
The overnight runs of the American and European weather models maintained hotter trends from runs earlier in the week, continuing to show “numerous Bcf” in added demand, according to NatGasWeather.
“The pattern for next week is forecast to remain hot over most of the southern two-thirds of the U.S. with highs of 90s to lower 100s,” the firm said. “The overnight data maintained a hot U.S. pattern continuing July 10-13, although it does shift the hottest portion of the heat dome over the west-central U.S., thereby allowing a little stronger cooling over the Great Lakes and Northeast.”
Maxar’s Weather Desk similarly forecast above-normal temperatures from the western to central Lower 48 during the 11-15 day period, from July 9-13.
“Rounds of unsettled conditions are from the Midwest to the East Coast, where the temperature forecast is closer to normal,” Maxar said.
The six- to 10-day period, from Monday through July 8, saw small changes in the latest forecast as of early Wednesday.
“The period begins with a ridge centered from the Midcontinent to the Southeast,” Maxar said. “The storm track is along the periphery of the ridge, resulting in wetter conditions for the Midwest toward the Mid-Atlantic. This storm track represents the boundary between below-normal temperatures in Canada and at times in the Northeast from above normal temperatures in the lower Midwest toward the Southern Plains.”
While not hotter-trending overnight, the forecast heading into Wednesday’s session offered sufficient heat through the first third of July to keep weather sentiment “solidly bullish,” according to NatGasWeather.
Summer heat has the potential to “largely offset” lost demand from the ongoing outage at the Freeport liquefied natural gas terminal, the firm said.
“As such, we give bulls the benefit of the doubt that they are back in control as long as production underperforms and widespread heat remains in the forecast,” NatGasWeather said.
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