Gas Prices Rise as Heat Waves Boost Demand

Hot weather is pushing up natural gas prices in the US. Forecasts predict warmer-than-normal temperatures across most of the country from early to mid-July. This means more people will crank up their air conditioners, increasing demand for gas-powered electricity. Energy analysts say this trend could keep prices elevated in the short term. Meanwhile, global gas supplies are tightening. A major gas export plant in Qatar suffered damage earlier this year, reducing its output by 17%. Since this facility handles about one-fifth of the world’s liquefied natural gas, the disruption could drive up demand for US gas exports. Political tensions in the Middle East, like the closure of a key shipping route, are also limiting gas shipments to Europe and Asia, adding to the pressure.On the home front, US gas production is slowly rising. The Energy Information Administration recently raised its forecast for 2026, expecting higher output. While this could eventually ease prices, it hasn’t happened yet. In the meantime, power plants are burning more gas to meet summer electricity needs. Last week, US electricity output jumped over 2% compared to the same time last year. Storage levels add another layer of complexity. Natural gas stockpiles grew last week but fell short of predictions. Still, they remain above the five-year average, suggesting there’s enough supply for now. Europe’s gas reserves, however, are only 46% full—well below the typical level for this time of year. That could mean more competition for US gas in the global market. Drilling activity in the US isn’t keeping up with demand. The number of active gas rigs rose slightly last week but is still far below the peak seen earlier this year. If production doesn’t increase soon, prices might stay high longer than expected.