This summer, the United States is experiencing an intense heat wave that is pushing natural gas prices sharply higher. The soaring temperatures across many parts of the country are driving up demand for air conditioning, which in turn increases the need for electricity generated by natural gas. Since nearly half of U.S. power generation relies on natural gas, when millions of air conditioners run simultaneously during extreme heat, it puts significant pressure on gas supplies.
The situation is particularly acute in regions like Texas and California, which together consume about 35% of the nation’s natural gas. These areas are seeing temperatures well above average—sometimes 10 to 15 degrees Fahrenheit hotter than usual—leading to near-record levels of Cooling Degree Days (CDD), a measure used to estimate energy demand for cooling buildings.
Natural gas storage levels are also lower than last year at this time, meaning there’s less buffer available as demand surges. This combination of high consumption and reduced reserves has caused prices at key trading hubs like Henry Hub to climb from around $3.48 per million British thermal units (MMBtu) in May toward $4.50 or more by early July.
Adding complexity to this market dynamic are geopolitical tensions involving Iran and Israel that raise concerns about global supply security, especially regarding liquefied natural gas (LNG) shipments passing through critical chokepoints such as the Strait of Hormuz.
All these factors together create a perfect storm: record-breaking heat driving unprecedented cooling needs; tight storage conditions limiting supply flexibility; and international conflicts threatening LNG exports—all contributing to volatile and rising natural gas prices during this extreme U.S. summer heat wave.
For consumers and businesses alike, this means higher energy bills as utilities burn more natural gas to keep homes and workplaces cool under relentless sunlit skies stretching across much of the country.