Natural gas prices soar as demand for cooling boosts

natural gas

Natural gas prices peaked this Monday, as cooling demand is forecast to boost in coming weeks; forecasts have predicted that weather will get hotter around the U.S. Consequently, more natural gas is going to be needed in order to cool off departments and buildings.

Firstly, Front-month gas futures rose 2.1 cents, or 0.5%, to settle at $3.935 per million British thermal units; Reuters reported.

Secondly, about the rise, Phil Flynn, senior analyst at Price Futures Group in Chicago, said. “The market is looking ahead to what could be a very hot end to the summer; with the cooling degree days likely to go up a little bit.”

Thirdly, in that same regard, Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, said. “Today’s price advance, although contained below Friday’s highs; reinforced our bullish view as we still see achievement of the $4.18 level as a high probability before this week is out.”

Moreover, data provider Refinitv also projected that U.S. demand, including exports, will rise from an average of 91.2 bcfd this week to 95.2 bcfd next week. “We believe that early gains were shaved by the plunge in petroleum values; and also, that today’s highs will see violation by mid-week at the latest.” Added Ritterbusch.

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U.S. Liquified natural gas exports to remain strong for the rest of the year

In addition, as we reported previously, liquified natural gas prices also peaked. Flynn also said to Reuters that U.S. LNG will stay very strong; while U.S. supply will weaken; leading to a tight market this year, which should support prices.

In fact, last week natural gas prices jumped to their highest since December 2018 at $4.187.

On the other hand, U.S. LNG exports reached 10.8 bcfd in July, up from 10.1 bcfd in June but still below April’s record 11.5 bcfd. On the other hand, U.S. production will remain unchanged, according to Refinitiv, in 92.2 billion cubic feet per day next week. That number will still be below November’s all-time monthly high of 95.4 bcfd.

Finally, according to experts, U.S. LNG exports will remain strong for the whole year; supported by European natural gas prices ar tecord levels; and also Asian gas trading nearly at $15 per mmBtu.

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