NEW YORK: US natural gas futures held near a one-week high on Wednesday on a drop in daily output and forecasts for the weather to remain hotter-than-normal through early August, especially in Texas.

That price increase came despite forecasts for less demand this week than previously expected and slow growth in the amount of gas flowing to US liquefied natural gas (LNG) export plants due to ongoing maintenance outages at several facilities.

Power demand in Texas hit a record high for a second day in a row on Tuesday and will likely break that record again on Wednesday (and next week) as homes and businesses keep air conditioners cranked up to escape a lingering heatwave, according to the Electric Reliability Council of Texas (ERCOT), the state’s power grid operator.

Extreme heat boosts the amount of gas generators burn to produce power for cooling, especially in Texas, which gets most of its electricity from gas-fired plants. In 2022, about 49% of the state’s power came from gas-fired plants, with most of the rest coming from wind (22%), coal (16%), nuclear (8%) and solar (4%), according to federal energy data.

Front-month gas futures for August delivery on the New York Mercantile Exchange remained unchanged at $2.628 per million British thermal units at 9:43 a.m EDT (1343 GMT). On Tuesday, the contract closed at its highest since July 12.

Data provider Refinitiv said average gas output in the US Lower 48 states rose to 101.6 billion cubic feet per day (bcfd) so far in July, up from 101.0 bcfd in June. That compares with a monthly record of 101.8 bcfd in May.

On a daily basis, however, output was on track to drop by 1.8 bcfd to a preliminary one-week low of 99.9 bcfd on Wednesday due mostly to declines in North Dakota and Pennsylvania. That would be the biggest one-day drop since January. But analysts noted preliminary data is often revised by large amounts later in the day.

Meteorologists forecast the weather in the Lower 48 states would remain hotter-than-normal through at least Aug. 3.

With LNG export plants expected to return soon, Refinitiv forecast US gas demand, including exports, would rise from 108.1 bcfd this week to 108.6 bcfd next week. The forecast for this week was lower than Refinitiv’s outlook on Tuesday.

Gas flows to the seven big US LNG export plants rose to an average of 12.8 bcfd so far in July from 11.6 bcfd in June. That, however, was still well below the monthly record of 14.0 bcfd in April due to ongoing maintenance at several facilities in Louisiana, including Cameron LNG, Cheniere Energy’s Sabine Pass and Venture Global LNG’s Calcasieu.