US natural gas futures steady as $194 summer bills lift demand

U.S. natural gas futures held steady near recent levels Monday, with the market balancing rising summer cooling demand against sufficient storage inventories as temperatures climb across the country.

"The market is in a wait-and-see pattern as traders assess whether sustained heat will draw down storage quickly enough to justify higher prices," said Omar Tariq, energy analyst at Edgen.

Average summer electricity bills in South Carolina reached $194, consuming 3.2% of median household income, according to a ConsumerAffairs analysis cited by WCBD. That places South Carolina 10th nationwide for summer cooling cost burden, though the share has improved from 3.8% in 2020. Nationwide, 7.5 million households reported keeping homes at unhealthy temperatures in 2024, while 8.2 million could not use air conditioning at all, data from the U.S. Energy Information Administration showed.

The rangebound trading reflects a market awaiting clearer demand signals from sustained heat waves or weekly storage data. With grid modernization costs being passed to ratepayers, higher electricity bills could further boost natural gas demand for power generation through the peak summer months.

Henry Hub futures have struggled to break out of their recent range as the market weighs competing forces. On the supply side, production remains strong while storage levels sit near historical averages for this time of year. On the demand side, the National Weather Service's latest forecasts point to above-normal temperatures across most of the Lower 48 states over the next two weeks, which could drive increased power-sector consumption.

The power sector accounts for roughly 40% of U.S. natural gas demand, making summer weather patterns the single most important near-term price driver. The EIA's weekly storage report, due Thursday, will provide the next major data point, with analysts expecting a draw that could mark the start of peak summer inventory withdrawals.

Alabama, Mississippi and Louisiana had the highest cooling cost burdens in the country, while Washington, Alaska and Colorado ranked among the lowest, the ConsumerAffairs analysis showed. The disparities highlight how regional climate, electricity prices and income levels combine to determine household energy affordability.

Alexis Abramson, dean of the Columbia Climate School, said grid modernization is the primary answer to rising cooling costs, but noted that "utilities are passing those modernization expenses directly to ratepayers." That dynamic creates a feedback loop where higher electricity costs support natural gas demand even as they strain household budgets.

This article is for informational purposes only and does not constitute investment advice.