A somewhat hotter lean in the overnight forecasts helped natural gas futures bulls regain some ground in early trading Tuesday. The September Nymex contract was up 3.4 cents to $2.187/MMBtu at around 8:45 a.m. ET.

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There were no major shifts in the weather outlook overnight, according to NatGasWeather, though the forecaster noted a small uptick in projected cooling degree days from the European model.

“No changes overall as strong demand continues this week due to widespread highs of upper 80s to 100s besides the Midwest.” However, conditions are “set to ease late this weekend and next week as weather systems with showers and cooling sweep across the Midwest and east-central U.S. with highs of only 70s to lower 80s, including relatively deep into the South,” the forecaster said.

The pattern for the second half of August remains warm, but the most intense heat looks to be focused over California and the Southwest instead of further east where hotter temperatures would have more impact on natural gas demand, NatGasWeather said.

“Warmer temperatures are expected to regain across the eastern half of the U.S. August 23-26,” which is “where the overnight European was back a little hotter,” the forecaster said.

Rallying natural gas prices both domestically and in Europe last week have coincided with rising liquefied natural gas (LNG) feed gas demand, according to Genscape Inc. The firm’s estimates show LNG feed gas demand as of last week reaching an aggregate 4.5 Bcf/d, the highest level since late June.

“These recent gains have been driven by Freeport LNG’s return to service after no nominations from July 7 to July 29, and a ramp up in deliveries to Corpus Christi LNG,” Genscape analyst Josh Garcia said.

Still, analysts at Energy Aspects said their recent gauge of the supply/demand balance does not show enough tightness to fully justify the surge in natural gas prices, with inventories still on track to exit the injection season at an estimated 3.9 Tcf. Fundamentals are “not markedly different from what we had anticipated before the start of the month.”

The Energy Aspects analysts said recent data suggests the rise in prices has induced additional hedging activity for 2021, activity they see “locking in more production than indicated by the 2Q2020 earnings calls and helping producers substantiate production to their lenders in the current environment.”

September crude oil futures were up 77 cents to $42.71/bbl at around 8:45 a.m. ET, while September RBOB gasoline was up about 2.2 cents to $1.2511/gal.