US Natural Gas Prices Rise To 5-Month Highs On Hot Weather Forecasts: Energy Stocks On The Move Monday

Prompt-month natural gas futures have exceeded $3 per million British thermal units on Monday, marking the highest level since mid-January 2024 and hitting a potential four-day winning streak, spurred by forecasts predicting increased cooling demand due to anticipated warm weather in June.

Last week, natural gas prices rose by 12.8%, and are currently eyeing the seventh week of gains out of last eight.

“With a blanket of heat stalling over the southern part of the country, market bulls maintained control,” said Jodi Shafto, senior natural gas reporter at Natural Gas Intel.

Chart: US Natural Gas Price Have Rallied 95% Since Late April’s Lows

NatGasWeather highlighted that much of the country is expected to experience temperatures ranging from the upper 70s and 80s in the Midwest and Northeast to the upper 80s and 90s elsewhere, with extreme heat in California and Texas reaching the mid-100s.

The American forecast model predicts significantly above-average temperatures from Monday, June 17 to Monday, June 24.

"Either way, the pattern is hot enough for stronger-than-normal demand," NatGasWeather said. This trend is anticipated to reduce natural gas storage surpluses to around 450 billion cubic feet (Bcf) or slightly below by the end of the month, according to NatGasWeather.

In the week ending May 31, U.S. utilities added 98 Bcf of gas to storage, surpassing market expectations of an 89 Bcf increase. This was the ninth consecutive week of seasonal storage increases, bringing the total stockpiles to 2,893 Bcf. This level is 373 Bcf higher than the same period last year and 581 Bcf, or 25%, above the five-year average of 2,312 Bcf.

The weekend GFS lost a few CDDs, although the ECMWF gained a few. Both forecast light to moderate national demand through Thursday but then both are quite hot with the US pattern for the 3rd week of June, just with the EC numerous CDDs hotter compared to the GFS. #natgas pic.twitter.com/d28vw0jcka

— NatGasWeather.com (@NatGasWeather) June 9, 2024

Monday’s Stock Movers In The Energy Sector

Companies involved in the natural gas market outperformed oil-related stocks on Monday.

• Tellurian Inc. TELL skyrocketed 13.5%, extending a 5-day rally started last week following rumors that Saudi giant Aramco was in discussion with the company for a liquified natural gas (LNG) project.
• Ring Energy Inc. REI rallied 3.9%
• Comstock Resources Inc. CRK, soared 3.8%
• Matador Resources Company MTD was up 3.7%
• Antero Resources Inc. AR rose 3.5%.
• Obsidian Energy Ltd. OBE was 3.1% higher.

The United States Natural Gas Fund UNG, which mirrors the performance of Henry Hub natural gas prices, increased by 4.7%, while the First Trust Natural Gas ETF FCG, tracking the performance of 48 natural gas companies, rose by 2%.

The broader Energy Select Sector SPDR Fund XLE rose 1.1%.

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Image generated using artificial intelligence via Midjourney.