Prices for natural gas rose by almost 9% on Friday, even though the weekly storage report did not show much movement.
Natural gas prices hit $ 2,367 at 2:26 pm EDT, an increase of 8.48% or $ 0.185, even though the EIA’s weekly storage report a day earlier showed a small increase of 58 Bcf in working gas in storage. The market had expected a larger construction.
Also Bullish for natural gas on Friday were forecasts for hot weather and reports of increased LNG exports.
Natural gas futures for early months on Friday hit their highest since the end of last year on this data, as it is expected that use of air conditioning will increase as people try to treat the heat wave. This will increase the demand for natural gas.
This will be especially true in Texas, where the demand for power in general – and as a result for natural gas – is expected to reach a record high today if the heat wave sets, according to Reuters.
These record highs for power demand will come even if industrial activity has not yet returned to pre-pandemic levels.
This unusual power demand has led to increases in power prices in the western part of the United States, which in turn has boosted the price of natural gas.
Fut-Natural Gas Futures were up more than $ 0.15 to $ 2,335 on Friday afternoon.
LNG exports have also increased, with improved demand over the next few weeks, although the EIA stated that US LNG exports will remain at low levels for the rest of the summer, with planned loads of LNG still canceled. According to EIA data quoted by Kallinish, 46 LNG cargoes were canceled in June, 50 were canceled in July, 45 were canceled in August, and so far 30 have been canceled for September.
By Julianne Geiger for Oilprice.com
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