Prompt-month natural gas futures struggled to sustain momentum on Tuesday morning as weather forecasts and liquefied natural gas (LNG) demand leaned bullish, while robust supply remained a counterweight.

At a Glance:

• Heat remains seasonally strong this week
• LNG activity is ramping into September
• Production is solid and storage remains healthy

Natural gas futures were caught between supportive demand signals and steady supply as trading opened Tuesday. Forecasts continued to point to seasonally robust heat this week, and LNG activity was increasing as September began, reinforcing demand just as the market moved deeper into the shoulder-season transition. At the same time, production remained solid and storage levels healthy, limiting the market’s ability to extend gains.

The latest price action followed a mixed start to the week. On Monday, natural gas futures edged higher as forecasts placed September among the hottest on record, with recovering LNG demand and shrinking storage surpluses offsetting production that was still running near record highs. That combination has kept traders focused on the balance between late-summer cooling demand and the supply cushion entering fall.

Physical markets also strengthened across several regions. In the Southeast and along the Gulf Coast, cash natural gas prices surged Monday as intense air conditioning demand under a persistent heat dome combined with recovering LNG exports to lift hubs from Louisiana to Florida.

Southeast Natural Gas Cash Vaults Past $7 as Western Spike Deflates

Physical natural gas prices surged across the Gulf Coast and Southeast Monday as air conditioning demand under an entrenched heat dome combined with recovering LNG exports to bid up hubs from Louisiana to Florida.

Elsewhere, European natural gas prices spiked Monday as competition with Asia for LNG cargoes intensified amid renewed clashes between the United States and Iran.

Europe’s Fight for LNG Puts TTF Back on the Upswing

European natural gas prices spiked Monday as competition with Asia for LNG cargoes intensified amid renewed clashes between the United States and Iran.

In the U.S. physical market, prices advanced during the final full week of August as scorching heat across the southern part of the country and supply interruptions temporarily stalled flows to the Southwest and Southern California.

Weekly Natural Gas Spot Prices Advance as Southwest Heat, Supply Disruptions Fuel Competition

The physical natural gas market advanced in the final full week of August, bolstered by scorching heat across the southern reaches of the country and supply interruptions that temporarily stalled flows to the Southwest and Southern California.

The industrial side of the market also showed signs of tightening. Regional natural gas basis advantages for U.S. ammonia producers are narrowing heading into the fall, which is pressuring production margins in key markets.

Is the Cheap Natural Gas Advantage for Ammonia Producers Shrinking?

Regional natural gas basis advantages for US ammonia producers are tightening heading into the fall, tightening production margins in key markets.

At the start of the trading week, natural gas futures were little changed early Monday as market participants weighed elevated cooling demand and solid LNG volumes against healthy supply. With both the weather-driven demand backdrop and supply conditions still in view, the market entered the week with limited directional conviction.

Heat, LNG Counter Supply as Natural Gas Futures Launch Trading Week

Natural gas futures hovered on both sides of even early Monday as market participants contrasted elevated cooling demand and solid LNG volumes against healthy levels of supply.

Kevin Dobbs

Kevin Dobbs joined NGI in April 2020. Before that, he worked as a financial reporter and editor for S&P Global Market Intelligence, covering financial companies and markets. Earlier in his career, he was an enterprise reporter for the Des Moines Register. He holds a bachelor's degree in English from South Dakota State University.