Above-average temperatures across certain regions of the U.S. are expected to boost demand for gas-fired electricity, according to a new report from Rystad Energy.

The forecast from the National Oceanic and Atmospheric Administration for the Mountain and Pacific regions as well as the South-Central region will add further pressure on the demand side, Rystad’s gas and LNG analyst Christoph Halser wrote Sept. 26 in the report.

“This is expected to lead to higher gas-for-power demand in those regions through early and mid-October, respectively,” Halser said. “Meanwhile, temperatures are also expected to rise in the South-Central region at the end of September.”

Short-term concerns in the U.S. related to tropical storms and hurricanes in the Gulf of Mexico have also led to a rise in Henry Hub prices in recent weeks.

The Nymex price opened at $2.90/MMBtu on Sept. 30 compared to $2.13/MMBtu on Aug. 30, according to Bloomberg data. In comparison, LNG prices at the Title Transfer Facility and the Japan Korea Marker are in the low teens.

In Europe, cooler temperatures in coming days are also expected to result in a short-term rise in gas demand for heating across the continent.

"Norway concludes its gas maintenance season with some disruptions, while hurricanes add further risks to U.S. supply,” Halser said. “This comes at an untimely moment, as cold temperatures across Europe are expected to cause a short-term rise in gas demand for heating, marking an early start to the heating season.”

As of Sept. 24, U.S. feedgas declined 4.8% week-over-week to 12.28 Bcf/d, largely driven by scheduled maintenance at Cove Point since Sept. 20, according to Halser. The LNG terminal, near Lusby, Maryland, is scheduled to resume operations on Oct. 11, Halser said.

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