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Extreme Heat Waves Set To Drive Up US Natural Gas Prices: 10 Energy Stocks To Watch This Summer

The U.S. faces severe heat waves, impacting areas from the Midwest into much of the Ohio Valley, Great Lakes, Northeast, and Mid-Atlantic through the next few days. According to the latest updates from the National Oceanic and Atmospheric Administration (NOAA), high temperatures and warm overnight lows will likely challenge daily and even some monthly records. Heat index readings are expected to peak from 100 to 105 degrees in many locations. “Those without access to reliable air conditioning are urged to find a way to cool down. Record warm overnight temperatures will prevent natural cooling and allow the heat danger to build over time indoors without air conditioning,” the NOAA wrote. Increased Demand and Rising Prices During heat waves, electricity demand typically surges. People rely heavily on air conditioning to cool their homes and businesses. This surge in electricity use typically drives up natural gas prices. For example, in June 2023, U.S. natural gas prices — as tracked by the US Natural Gas Fund LP (NYSE:UNG) — climbed for four consecutive weeks due to elevated temperatures boosting electricity demand. A similar trend is emerging this year. Henry Hub gas prices are poised for their third consecutive month of increases, fueled by higher-than-average temperatures in late spring. Analyst Insights As the summer of 2024 heats up, investors ...