Natural gas spikes on outlook for record heat

Aug. 14, 2020 |By: Carl Surran, SA News Editor seekingalpha.com

Natural gas prices (NG1:COM) were little changed for most of the week before surging +7.5% today to $2.35/MMBtu, notching a new YTD high, on speculation that record heat will spark demand for the fuel in the western half of the U.S.

The latest NOAA weather forecast sees warmer than average temperatures still expected for the western half of the U.S. and cooler than average in the east.

Refinitiv expects U.S. demand next week will reach 90.1B cf/day next week, up from yesterday's estimate of 89.6B cf/day.

While gas inventories are above the five-year avg, "this surplus could be further eroded by extant declines in U.S. output," Stephen Schork, president of the Schork Group, tells Bloomberg.

"The ingredients are there for continued strength in gas... assuming that we see an actual rebound in economy activity (domestic and international) and a normal winter," Schork says.

 

Views: 367

Reply to This

Replies to This Discussion

While scanning CNBC at midday, I saw NG up just over 7% and wondered what is fueling the increase.

Writing from the balmy Coachella Valley, I can attest that there is a need for that power. Palm Springs broke last year's record of 117º today. We topped out at 120º and could go higher tomorrow. All the windmills nearby probably can't keep up.

Holy climate change, Batman.  120 degrees!!  I'm all for a bump in nat gas prices owing to A/C usage but what in the world happens to those in the Coachella Valley, and elsewhere, that can not afford A/C.  In the 1980's I attended a conference in San Francisco and discovered that much of the city did not have A/C.  Unfortunately nether did my beautiful old hotel in the central  business district.  I flew out of DFW at 102 degrees and thought the the high 80's in the bay area was positively balmy.  On the way from the airport thru downtown, everyone on the street looked miserable.  Their jackets were off and they were mopping their brows.  Heat effects are relative to experience but even coasts with traditionally moderated temps compared to the interior regions will experience this kind of extreme heat, now and throughout the next decades.  I hope all of the San Francisco CBD now has A/C, otherwise I will not be returning.

Palm Springs and other Coachella Valley cities routinely top out at 105-110 in the summer so AC is necessary. What also makes this bearable is  low humidity - usually 10%-15%. However, August is the month when humidity can creep up due to so-called monsoonal flow from the Pacific. Couple higher humidity with 115º or above and it's miserable.

We are primarily a resort city so lots of residents are away until after Labor Day or October. 

SoCal Edison did impose a rolling blackout last night. My power was off for two hours starting at 6:45pm. 

Solar is prevalent here (I don't have it) but when the grid is down, home batteries can power only so much for so long. 

Thanks, John.  I understand that California now requires solar for new residential construction but do not know if it has gone into effect yet.  AC pulls a lot of power and high humidity makes units less efficient and causes them to work harder.  Considering the threat of wild fires and mud slides, I see micro-grids in Cali's future.  In fact your area may be the first to reach a level of EV ownership, solar power and battery backup deployment that allows for a detachment from the regional power grid in times of emergency.  Micro-grids will have numerous applications beyond rural, isolated areas.

Thanks for posting.  Amazing.  Here's a link to an article about rolling blackouts and the high price of energy in California.  

https://www.msn.com/en-us/weather/topstories/california-orders-firs...

Yes, California will have continuing challenges from climate change and wild fires but that has little to do with the price of natural gas.  If you want to see what does, check my Haynesville rig count discussion when I get it updated.  It is a startling change in the pace of development.

RSS

Support GoHaynesvilleShale.com

Blog Posts

The Lithium Connection to Shale Drilling

Shale drilling and lithium extraction are seemingly distinct activities, but there is a growing connection between the two as the world moves towards cleaner energy solutions. While shale drilling primarily targets…

Continue

Posted by Keith Mauck (Site Publisher) on November 20, 2024 at 12:40

Not a member? Get our email.

Groups



© 2024   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service