Nat-Gas Prices Get Boost from Record-High West Texas Temperatures
Natural gas prices gained momentum on Monday due to forecasts of record-high temperatures in West Texas this week, which is expected to boost demand for electricity generation. The Electric Reliability Council of Texas predicted peak power demand could exceed the all-time record set in July.
The US weather forecasts also reduced nat-gas demand from electricity providers to power air conditioning use, as updated projections showed above-average temperatures are still expected across Texas and the Southwest through September 7. However, this might not be enough to offset the overall increase in demand due to extreme heat.
US dry gas production was up 2.3% year-over-year at 112.0 bcf/day, while lower-48 state gas demand rose by 5.5% y/y to 77.7 bcf/day. Estimated LNG net flows to US LNG export terminals were 17.2 bcf/day, down 0.3% week-over-week.
The Edison Electric Institute reported that US electricity output in the week ended August 15 rose by 2.36% y/y to 101,498 GWh. However, the EIA projected that US nat-gas storage levels will swell to 3,985 bcf at the end of October, the highest level in 10 years and 5% above the five-year average.