Sign Up for FREE Daily Energy News
Canadian Flag CDN NEWS  |  US Flag US NEWS  | TIMELY. FOCUSED. RELEVANT. FREE
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2
BREAKING NEWS:

Vista Projects
Hazloc Heaters
Copper Tip Energy Services
Vista Projects
Copper Tip Energy
Hazloc Heaters


U.S. natgas jumps 7% as heat wave boosts air conditioning use


English Español 简体中文 हिन्दी Português
These translations are done via Google Translate
July 11 (Reuters) – U.S. natural gas futures jumped about 7% to a one-week high on Monday as power generators burned more of the fuel to keep air conditioners humming during a brutal heat wave that has boosted electric demand to record highs in several parts of the country.

Texas’s power grid operator warned of potential rolling blackouts amid predictions demand would hit all-time highs on Monday and Tuesday as homes and businesses crank up their air conditioners to escape the extreme heat. read more

Power demand also broke records in the Southwest Power Pool (SPP) and in several parts of the U.S. Southeast over the past week.

“Supply concerns as a result of high coal to gas fuel switching continue to be the driving force behind the current market’s rally,” analysts at Gelber & Associates said in a note. U.S. coal was trading at record highs, making it uneconomical for electric companies to switch from gas to coal for power generation.

The jump in gas prices came despite an increase in U.S. gas output to record highs and forecasts for lower gas demand over the next two weeks than previously expected.

Traders also noted the ongoing outage at Freeport LNG’s liquefied natural gas (LNG) export plant in Texas will leave more gas in the United States for utilities to quickly refill low stockpiles for the winter.

Freeport, the second-biggest U.S. LNG export plant, was consuming about 2 billion cubic feet per day (bcfd) of gas before it shut on June 8. Freeport LNG has said the facility could return to service by October. Some analysts, however, think the plant could remain shut longer. read more

In what has been an extremely volatile couple of months, front-month gas futures rose 39.2 cents, or 6.5%, to settle at $6.426 per million British thermal units (mmBtu), their higher close since June 29.

So far this year, the front-month was up about 72% as much higher prices in Europe and Asia keep demand for U.S. LNG exports strong, especially since Russia’s Feb. 24 invasion of Ukraine stoked fears Moscow would cut gas supplies to Europe.

Gas was trading around $48 per mmBtu in Europe and $39 in Asia .

GLJ
GLJ

Since mid-June, Russia has exported around 3.8 bcfd of gas on the three main lines into Germany – Nord Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the Russia-Ukraine-Slovakia-Czech Republic-Germany route.

That is down from around 6.5 bcfd in early June and an average of 9.4 bcfd in July 2021.

Analysts expect Russian exports to Europe will drop further next week now that the Nord Stream pipe was shut for maintenance from July 11-21.

TOP PRODUCER

U.S. futures lag far behind global prices because the United States is the world’s top producer, with all the gas it needs for domestic use, while capacity constraints limit LNG exports.

Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 96.2 bcfd so far in July from 95.3 bcfd in June. That compares with a monthly record of 96.1 bcfd in December 2021.

With hotter weather coming, Refinitiv projected average U.S. gas demand including exports would rise from 97.9 bcfd this week to 98.3 bcfd next week. Those forecasts were lower than Refinitiv’s outlook on Friday.

The average amount of gas flowing to U.S. LNG export plants slid to 11.1 bcfd so far in July from 11.2 bcfd in June. That was down from 12.5 bcfd in May and a monthly record of 12.9 bcfd in March due to the Freeport outage.



Share This:



More News Articles


GET ENERGYNOW’S DAILY EMAIL FOR FREE