US natural gas futures jumped about 10% to a 5-week high on expectations of sweltering weather over the next two weeks that will increase the use of air-coolers and demand for electricity from gas-fired plants, following a drop in demand for electricity already. Standard in a few regions in the United States, including Texas.
“Demand for electricity is at an all-time high,” analysts at Gilber & Associates said in a report, adding that “next week is expected to be the hottest of the season.”.”
The price increase came despite a drop in gas feedstock to LNG export plants in Louisiana and the continued shutdown of the Freeport plant in Texas, leaving more fuel in the United States..
So far this year, US gas contracts to the nearest maturity are up about 115 percent because much higher prices in Europe and Asia keep demand for US LNG exports strong, especially since the Russian invasion of Ukraine is fueling fears that Moscow may cut off gas supplies to Europe..
Gas is traded around $48 per million thermal units in Europe and $38 in Asia.