Tom Nolan + 2,441 TN September 8, 2021 After settling 3% lower on Tuesday, U.S. natural gas prices surged by 8% early on Wednesday to new multi-year highs amid tighter supply and low storage levels in view of expected moderate to high demand for cooling in most of the western and southern U.S. As of 10:28 a.m. EDT on Wednesday, the price of the U.S. benchmark Henry Hub was soaring by 7.68% at $4.927 per million British thermal units (MMBtu). Models for the second half of September predict warm weather with high temperatures, which is expected to drive demand for natural gas. This week, national demand will be low across the northern U.S. but moderate to high across the western and southern U.S., according to the September 7-13 model from NatGasWeather.com. In addition, natural gas supply from the U.S. Gulf of Mexico remains mostly shut-in ten days after Hurricane Ida made landfall in Louisiana. According to data from the Bureau of Safety and Environmental Enforcement (BSEE), as of Tuesday, 77.89 percent of the total Gulf of Mexico natural gas production continued to be shut-in. Last week’s EIA natural gas storage report also signaled continued tightness in the market. The EIA reported last Thursday a net increase of 20 Bcf in working gas in storage from the previous week. This was lower than the expected 25 Bcf storage build, although traders had prepared for a small injection into storage due to the disruptions from Hurricane Ida. As of last week, stocks of U.S. natural gas were 579 Bcf less than last year at this time and 222 Bcf below the five-year average of 3,093 Bcf. At 2,871 Bcf, total working gas is within the five-year historical range. U.S. natural gas prices had been soaring even before the disruption from Hurricane Ida, even though the biggest gas-producing basin, Appalachia, saw in the first half of 2021 its highest average output since natural gas production in the Marcellus and Utica shale formations started in 2008. Prices were driven by surging U.S. gas exports via pipelines and liquefied natural gas (LNG) cargoes, which have been setting all-time high records this year. Scorching summer heatwaves and low natural gas inventories have also pushed natural gas prices higher over the past few months. By Tsvetana Paraskova for Oilprice.com FROM... 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