US natural gas futures ended higher on August 18, 2026, driven by intense and prolonged heat in Texas. This weather pattern compelled consumers to increase air conditioning usage, placing significant strain on gas-fired power generators and the state's electricity grid. The price increase reflected concerns over heightened demand for natural gas to fuel power plants.
Specifically, Houston is projected to experience average temperatures of $100$ degrees Fahrenheit ($38$ degrees Celsius) from August 20-23, which is $5$ degrees Fahrenheit above the seasonal norm, according to commercial forecaster AccuWeather. This surge in temperatures is anticipated to push the peak load on the Electric Reliability Council of Texas (ERCOT) power grid to potentially set a new record this week. This record demand is exacerbated by an expected decrease in wind generation, as noted by Eli Rubin, a senior energy analyst at EBW Analytics Group.
Earlier in August, on August 10, US natural gas futures saw their largest single-day jump in over two months. This surge was attributed to a significant shift in weather forecasts, predicting much hotter conditions across the central and southern US. This sudden change triggered short-covering among money managers, who had previously held the most bearish positions on gas since 2020. Hotter weather generally increases electricity demand as air conditioners run more frequently, boosting the need for natural gas-fired power generation and consequently raising prices.
