This week, the natural gas market may be supported by an increase in electricity demand for space cooling. Freedom analysts expect that during the summer period, U.S. gas prices could exceed the $3.5 per million British thermal units (BTU) mark, which is approximately 8.4% higher than current levels.
An additional supporting factor is the latest U.S. Department of Energy data on gas reserves. As of the end of May, the reserve volume increased by 95 billion cubic feet, which turned out to be below market expectations. At the same time, forecasts for the coming weeks suggest a more moderate replenishment of storage facilities compared to previous estimates.
Freedom notes that the reason for the revised forecasts is the continued elevated demand for space cooling. According to U.S. Department of Energy estimates, gas consumption will grow by 6.1% and 10.3% in June and July, respectively, compared to the previous month.
Another risk factor for the market remains the situation in the Middle East. According to analysts, a resumption of military actions against Iran could lead to a short‑term spike in gas prices and increase the volatility of energy markets.
Despite a 1.9% decline in U.S. natural gas quotations over the past week, Freedom maintains a positive outlook on the sector. Analysts believe that shares of U.S. gas producers have high upside potential if fuel demand continues to increase during the summer season.
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