Sign Up for FREE Daily Energy News
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2

Copper Tip Energy Services
Vista Projects
Vista Projects
Copper Tip Energy

US natgas climbs as hot weather outlook boosts power demand prospects

These translations are done via Google Translate
U.S. natural gas futures climbed more than 2% to a one-week high on Wednesday, as forecasts for warmer weather bolstered the demand outlook for the fuel to cool homes and businesses.

Front-month gas futures for July delivery on the New York Mercantile Exchange traded 5.6 cents higher, or 2.5%, to $2.32 per million British thermal units at 09:43 a.m. EDT.

Prices were rising “on a continued evolution of the weather outlooks for increasing gas demand from the power sector over the next three weeks,” said Gary Cunningham, director of market research at Tradition Energy.

Data provider Refinitiv forecast the number of cooling degree days (CDDs) in the coming two weeks to rise to 164, from the 153 CDDs forecast a day earlier, and above the 30-year normal of 147.

CDDs measure the number of degrees a day’s average temperature is above 65 Fahrenheit (18 Celsius) and provide a snapshot into likely demand for cooling.

Refinitiv estimated natural gas consumption by the U.S. power sector to jump to 37.6 billion cubic feet per day (bcfd) this week from 31.8 bcfd last week, driving overall demand this week to 95.7 bcfd from 90.9 bcfd.

Higher demand from power generators to produce electricity amid rising air conditioning use reduces the fuel available to go into storage for the peak winter heating season. That helps boost prices.

ROO.AI Oil and Gas Field Service Software

“The fundamentals have us probably capped well under $2.40 on the July (contract) until something significant happens like a return of the LNG terminals which are currently down for maintenance,” Cunningham said.

Gas flows to the seven big U.S. LNG export plants fell to an average of 12.0 bcfd so far in June, down from 13.0 bcfd in May. That is well below the monthly record of 14.0 bcfd in April due to maintenance at several facilities, including Cheniere Energy Inc’s Sabine Pass in Louisiana.

Production, meanwhile, was seen staying largely stagnant at 102.2 bcfd this week from 103 bcfd last week, according to Refinitiv data, before edging up to 102.6 bcfd next week.

Traders also awaited the U.S. Energy Information Administration’s weekly gas storage report at 10:30 a.m. EDT (1430 GMT) on Thursday.

(Reporting by Deep Vakil in Bengaluru; Editing by Sriraj Kalluvila)

Share This:

More News Articles