NEW YORK: US natural gas futures climbed about 2percent to a two-week high on Thursday, pulled higher by a 5percent jump in oil futures and forecasts for hotter weather and higher demand over the next two weeks than previously expected.
Oil futures jumped about 5percent on worries supply disruptions in the Middle East would increase after the Iran-backed Houthi group in Yemen attacked Saudi tankers in the Bab el-Mandeb Strait between the Red Sea and the Gulf of Aden.
Front-month gas futures for August delivery on the New York Mercantile Exchange rose 5.6 cents, or 1.9percent, to USD2.981 per million British thermal units (mmBtu), putting the contract on track for its highest close since July 9.
Gas prices rose even though analysts forecast energy firms added a bearish, bigger-than-usual 35 billion cubic feet (bcf) of gas to storage during the week ended July 17.
That compares with an increase of 27 bcf during the same week last year and a five-year (2021-2025) average increase of 30 bcf for the period.
Financial firm LSEG said average gas output in the US Lower 48 states rose to 110.4 billion cubic feet per day (bcfd) so far in July, up from 110.0 bcfd in June, but remained below the monthly record high of 110.6 bcfd in December 2025.
Meteorologists forecast the weather would remain mostly warmer than normal through August 7, forcing power generators to continue burning lots of gas to keep air conditioners humming. About 40percent of US power generation comes from gas-fired plants.
LSEG projected average gas demand in the Lower 48 states, including exports, would hold at 111.0 bcfd this week and next. Those forecasts were higher than LSEG’s outlook on Wednesday. Average gas flows to the nine big US LNG export plants eased to 17.2 bcfd so far in July due in part to maintenance at Freeport LNG’s export plant in Texas, down from 17.4 bcfd in June and the monthly record high of 18.8 bcfd in April.
The US became the world’s biggest LNG exporter in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more low-cost US gas. Global gas prices have spiked in recent years primarily due to supply disruptions linked to Russia’s invasion of Ukraine in 2022 and the US-Israeli war with Iran in 2026. Around the world, gas was trading near a 42-month high of about USD21 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and a four-month high of about USD22 at the Japan-Korea Marker (JKM) benchmark in Asia.
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