July natural gas futures (NGN24) rose +0.121 (+4.34%) on Tuesday, driven by revised weather forecasts predicting higher summer temperatures across the eastern and southern United States.
Elevated heat expectations have spurred a rally in demand from electricity providers, as increased air-conditioning usage is anticipated. Updated forecasts from Maxar Technologies indicate hotter conditions for parts of the US through July 2 compared to prior projections.
BNEF data shows lower-48 state dry gas production remained steady at 98.5 billion cubic feet per day (-0.4% year-over-year), while demand surged to 73.9 bcf/day (+12.6% year-over-year), highlighting strong consumption pressures.
Energy intensity gains from heightened electricity output further support nat-gas demand. The Edison Electric Institute reported a 10.89% year-over-year increase in US electricity generation to 84,405 GWh in the week ending June 8, with annual output rising 1.02% to 4,121,928 GWh.
Despite a notable inventory build, prices remain resilient. The EIA reported a +74 bcf weekly inventory increase as of June 7—above forecasts but below historical seasonal levels—yet supplies remain 12.9% above year-ago levels and 23.9% above the 5-year seasonal average.
Exploration activity remains constrained, with active rig counts unchanged at 98—a 2.75-year low since the pandemic-era nadir of 68 rigs in July 2020, according to Baker Hughes data dating to 1987.
