Escalating Weather Forecasts in the U.S. Drive a Surge in Natural Gas Prices
In the recent market context, natural gas prices have been influenced by a variety of factors. Mixed weather forecasts have been a significant player, with cooler-than-normal temperatures at times lowering cooling demand and hotter forecasts raising it regionally, affecting natural gas demand for electricity generation.
Another factor weighing on prices has been the expectations of natural gas inventory injections above seasonal averages, which suggest ample supply. However, steady production and supply levels have been balancing elevated cooling demand in the summer months, limiting price rallies. Geopolitical factors have also exerted bearish pressure on prices at times.
Forecaster Vaisala predicted above-normal temperatures for the West and East for the August 8-12 period. This increased temperatures are expected to boost natural gas demand from electricity providers for air-conditioning usage. The increase in natural gas prices on August 11 was due to forecasts for hotter US weather.
In the week ended July 19, US electricity output rose +2.1% y/y to 99,373 GWh. This rise was accompanied by an increase in Lower-48 state gas demand, which was 86.0 bcf/day (+7.1% y/y). The increased demand is a reflection of the anticipated hotter weather.
Recent US natural gas output has been up year-over-year. On Tuesday, Lower-48 state dry gas production was 108.1 bcf/day (+3.2% y/y). Estimated LNG net flows to US LNG export terminals on Tuesday were 15.3 bcf/day (+2.6% w/w).
The increased production levels are a cause for concern for some market analysts, as they weigh on natural gas prices. Last Friday's weekly Baker Hughes report showed that the number of active US natural gas drilling rigs in the week ending July 25 rose by +5 to a nearly 2-year high of 122 rigs.
As of July 18, nat-gas inventories were down -4.8% y/y, but were +5.9% above their 5-year seasonal average. However, as of July 22, gas storage in Europe was 66% full, compared to the 5-year seasonal average of 74% full for this time of year.
It is important to note that all information and data in this article is solely for informational purposes. The date of publication, Rich Asplund did not have positions in any of the securities mentioned in this article.
For more information, please view the website Disclosure Policy here. As of the current date, July 31, 2025, there are no available search results specifically reporting on August Nymex natural gas prices or related influencing factors for August 11, 2025. Existing data largely cover pricing and market conditions up to the end of July 2025. Therefore, any analysis of the price movements on or around August 11, 2025, would be speculative at this point. Updated market news after that date would be necessary to accurately explain the price changes.
In the past ten months, the number of gas rigs has risen from the 4-year low of 94 rigs reported in September 2024. Expectations for even higher US natural gas production are weighing on natural gas prices.
- The increased demand for electricity due to the forecasted warmer temperatures in the West and East from August 8-12, as predicted by Forecaster Vaisala, is expected to increase natural gas demand from electricity providers for air-conditioning usage, possibly impacting prices.
- Despite the rise in US natural gas production, which is a cause for concern for some market analysts, the expectations of natural gas inventory injections above seasonal averages and steady production and supply levels have been balancing elevated cooling demand in the summer months, resulting in limited price rallies.
