US natural gas rises to about $2.91/MMBtu on hot-weather demand hopes

US natural gas prices rose further to around $2.91/MMBtu on Thursday, the highest level in a month, as forecasts for several more weeks of hot weather lifted expectations for stronger cooling demand.

Well-above-average temperatures are expected across the eastern two-thirds of the US from August 31 through September 4, according to the Commodity Weather Group, which should sustain gas demand from power generators as air-conditioning use remains elevated.

Attention now turns to the weekly storage report, with expectations pointing to a smaller-than-normal inventory build.

These factors helped offset downward pressure from strong domestic production, with output in the Lower 48 states averaging a record 111.4 bcfd so far in August, up from 110.7 bcfd in July.

Meanwhile, average gas flows to the nine major LNG export facilities fell slightly to 17.1 bcfd so far this month from 17.2 bcfd in July, although signs are emerging of a recovery in LNG demand.