US natgas prices surge on heatwave, Henry Hub hits $3.80/mmBtu

Quantum Commodity Intelligence – US natural gas futures surged to fresh highs Tuesday as the west coast heatwave spread to other parts of the country, sending power demand soaring.

NYMEX natural gas prices Monday for July-delivery rocketed to a high of $3.811/mmBtu, basis Henry Hub, a gain of around $0.20/mmBtu (6%) from Monday's close, before easing back to $3.650/mmBtu later in the session.

Temperatures were 20 to 30 degrees Fahrenheit above the seasonal average throughout the northwest during the weekend and into this week, the US National Weather Service (NWS) said, with cities including Seattle and Portland hitting record temperatures.

"This event will likely be one of the most extreme and prolonged heat waves in the recorded history of the Inland Northwest," the NWS added.

Portland, Oregon, reached 44.4 Celsius (112 degrees Fahrenheit) Sunday, breaking the all-time temperature record of 42.2 C (108 F), which was set just a day earlier.  

"Very hot high pressure continues over the West with highs of 90s to 110s (F), although with record breaking heat easing over Portland and Seattle.," said natgasweather.com Tuesday.

US gas prices have been in a strong upwards trend since the start of June, underpinned by seasonally low inventories and buoyant global LNG prices.  

Henry Hub prices were below $3.000/mmBtu during the last week of May. 

Meanwhile, spot prices for natural gas at multiple hub locations across the country also soared higher, including the PJM hub (Pennsylvania-New Jersey-Maryland) which traded in excess of $60/mmBtu on Monday.