Hot 2nd Half of July Pattern to Keep Strong National Demand Going
July 11, 2022: Near record heat is expected from California to Texas to open the week w/highs of mid-90s to 115°F. It will also be hot across the East Tue-Wed, where highs will reach the 90s, including as far north as NYC. Overall, strong national demand Mon-Wed, aided by very light wind energy generation across ERCOT and where loads will be impressively strong. However, national demand is still expected to ease Thu-Sat as weather systems arrive across the Great Lakes, Ohio Valley, and Northeast w/showers and comfortable highs of 70s and 80s. In addition, there will be a weak tropical wave stalling along the Gulf Coast mid-week w/heavy showers for locally cooler conditions across from far eastern Texas to Florida. But what the nat gas markets likely care about most is the weekend weather data held an impressively hot pattern over most of the US July 16-23 w/widespread highs of 90s and 100s for strong to very strong national demand. We believe the pattern might have trended too hot for this period, especially since there’s potential for tropical showers to find ways into the southern US with cooling in time, suggesting the data could give back demand in time. But for now, the nat gas markets will view weather patterns as solidly bullish and have aided prices rallying more than 40 cents since Friday’s close.
Graph is from our Live HDD/CDD data and shows strong to very strong national demand most of the next 15-days due to solidly above normal CDDs besides briefly easing late this week.