Hot US Pattern Returns Next Week (Sept 4-10) to Further Tighten Supplies

August 30, 2023: While national natural gas demand was down this week, it will rebound next week as hot high pressure returns to cover most of the US w/highs of upper 80s to 100s, including 90s to Chicago and potentially NYC. This should lead to another smaller than normal build for the EIA report 3-out, and after tomorrow’s again comes in decently under the 5-year average due to widespread heat impacting much of the interior US last week. As a result, current surpluses of +268 Bcf will decrease towards +190 Bcf by mid-September, then with the potential to decline a little further if the 2nd half of September plays out warmer than normal, as we expect. Front month futures prices keep returning to $2.70 the past 2-3 months, and on cue, newly anointed Oct’23 contracts are trading both sides of it today. Prices are higher today, seemingly on next week’s hot pattern and in anticipation of tomorrow’s important EIA report to see if last week’s shocking low build of +18 Bcf proves true.