Natural Gas has been trading higher than the previous week in the USA as the front-month forecast on temperature was accurate for the southern plains, especially for Texas. The well above-average normal temperature in the densely populated states gave the buoyance force to air-conditioning demand and rising Natural Gas output.

As per NOAA’s climate prediction center, much warmer than average weather will be favored, and extreme heat waves will continue to scorch the southern territories throughout August. On the other end, a peace of joy for the industry has been ramping up winter demand will encourage the LNG export facilities. All of these have been giving promising support to the Natural Gas price market in the USA.

Moreover, if we light on the fact that several major players in the Natural Gas market have cut down the drilling Capex, Which has weakened the backbone of storage sites, thus, it is expected that Natural Gas production to reach a plateau of around 100 billion cubic feet a day within the end of the year or within a buffer of one month. The demand in the power sector for Natural Gas has been anticipated to break the record previous week as air conditioners keep making screeching noises around homes and offices to cater to the heat wave, according to the forecast of the Electric Reliability Council of Texas (ERCOT), that operates Texas’s electrical grid.

The primary source of power or electricity in Texas is Natural Gas-fired plants, which account for around 49% of the state’s total power requirement; the rest comes from other energy sources like the wind (20%), coal (17%), nuclear (8%), and Solar (6%), according to the federal energy data. Thus, Extreme heat will increase the power used to generate electricity in power plants.

The US is in the race to win the crown of the World’s biggest Liquified Natural Gas (LNG) supplier, replacing the top most on the list, like Australia and Qatar, after the supply disruptions due to the war between Russia and Ukraine. In 2022, 70% of the USA’s exports shipped to Europe in the hope of getting higher prices than the Asian market. As higher Natural Gas prices returned this year to Asia, shippers of the USA diverted their cargoes to Asia. Thus, as per ChemAnalyst, the export of US Natural Gas to Asia will increase this year, which will support the inventory level. As per data, there will be a rise in the US Gas demand from 101.7 billion cubic feet per day (bcfd) this week to 105.1 bcfd next week.