In August 2024, the natural gas market in the U.S. experienced fluctuations due to a combination of factors. A major heat wave hit the Midwest last week, with some of the heat spreading to the East Coast the following week. Temperatures are expected to return to slightly above seasonal averages. Although the national outlook for September suggests above-normal temperatures, demand for natural gas-fired power generation has likely peaked. So far this month, natural gas demand for electric power generation has averaged 46.9 Bcf (billion cubic feet) per day, slightly lower than the 47.4 Bcf per day recorded during the same period last year.

Bull Factors:
– Month-to-date natural gas production has averaged 101.6 Bcf per day, down from 102.7 Bcf per day during the same period last year. As major producers reassess their output, reduced production could further tighten the market by reducing the current surplus.

– Electricity demand from U.S. data centers is currently at 23 GW and is projected to surpass 30 GW by 2030, driven by the development of new data centers and advancements in artificial intelligence (AI). Utilities report that AI model training consumes five to seven times more energy than traditional servers, with inference processes (such as decision-making and calculations) requiring two to three times more energy. With more advanced technology pulling more energy from the grid, energy supply may tighten in the long term.