Natural gas markets are tightening as strong weather-driven demand, LNG flows and geopolitical risks put greater pressure on supply balances in both the US and Europe.
In the US, natural gas was trading around $2.83 on 24 August as forecasts continued to show above-average temperatures across parts of the South, Central states and West into early September. Persistent heat is lifting electricity demand for air conditioning, which increases gas consumption by power generators.
Stronger gas use through the end of summer could reduce the volume available for storage injections before the market shifts towards the winter heating season. That makes weather forecasts increasingly important over the coming weeks.
LNG exports are also moving back into focus. Maintenance at major Gulf Coast export facilities has temporarily reduced feedgas demand, leaving more gas in the domestic market. As those facilities return to normal operations, LNG demand could absorb more supply and tighten the US balance.
Strong production remains the main offset. US output is still high, while inventories remain above five-year averages. That gives the market a supply cushion and limits the risk of a sharper tightening in the near term. Strong wind and solar generation are also reducing gas use in some power markets.
European natural gas prices moved above €67.5 per megawatt hour, reaching their highest level since January 2023 as supply concerns increased.
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