NEW YORK: US natural gas futures fell about 3% to a one-week low on Tuesday with US output on track to hit a monthly record high and as exports from Canada increase as some producers in Alberta return to the wellpad after wildfires.
That price decline came despite forecasts for a little more US gas demand over the next two weeks than previously expected and as US power generators burn more gas to produce electricity due to low wind power, especially in Texas.
The amount of US power generated by wind dropped to just 7% of the total so far this week versus a recent high of 17% during the week ended April 21, according to federal energy data. That means there will be less gas available to go into storage.
The amount of power generated by gas has averaged 41% so far this week, up from a recent low of 37% during the windy week ended April 21.
In Texas, wind power was on track to generate just 7,344 gigawatt-hours (GWh) in May in the Electric Reliability Council of Texas (ERCOT), which would be the lowest for the month since 2019 when fewer turbines were in service.
Before this month, ERCOT data showed that the amount of wind power generated in May rose every year since 2015 due in part to an increase in the number of turbines operating, hitting a record for any month of 12,454 GWh in May 2022.
Front-month gas futures for June delivery on the New York Mercantile Exchange fell 6.4 cents, or 2.7%, to $2.336 per million British thermal units (mmBtu) at 9:45 a.m. EDT (1345 GMT), putting the contract on track for its lowest close since May 12.
Data provider Refinitiv said average gas output in the US Lower 48 states rose to 101.5 billion cubic feet per day (bcfd) so far in May, which would top April’s monthly record of 101.4 bcfd.
The amount of gas exported from Canada to the US was on track to jump to a near three-week high of 8.2 bcfd on Tuesday from 7.2 bcfd on Monday.
Over the past few weeks, the average amount of gas flowing from Canada to the US averaged just 7.2 bcfd as wildfires in Alberta and other western provinces caused some producers to shut oil and gas output, according to Refinitiv.
Comments
Comments are closed.