NEW YORK: US natural gas futures climbed about 3% on Tuesday on forecasts for the brutal heat wave blanketing much of the country to remain in place through at least late July, forcing power generators to burn lots of gas to produce electricity to keep air conditioners humming.
The price increase came despite forecasts for less demand next week than previously expected, recent increases in output and a drop in the amount of gas flowing to liquefied natural gas (LNG) export plants after Freeport LNG in Texas shut ahead of Hurricane Beryl.
Oil and gas companies in Texas were restarting operations after Hurricane Beryl lashed the state with 80-mile per hour (129-km per hour) winds, damaging property and leaving millions of people without power.
Hurricane Beryl lashed Texas with strong winds and heavy rains as it churned inland, forcing the closure of oil ports, cancellation of hundreds of flights and leaving over 2.7 million homes and businesses without power. About 2.3 million homes and businesses in Texas were still without power on Tuesday, down from more than 2.7 million on Monday.
Front-month gas futures for August delivery on the New York Mercantile Exchange rose 6.2 cents, or 2.6%, to $2.428 per million British thermal units (mmBtu) at 9:00 a.m. EDT (1300 GMT).
But with gas prices down about 21% over the past four weeks, speculators last week cut their net long futures and options positions on the New York Mercantile and Intercontinental Exchanges for a second week in a row to their lowest since early June, according to the US Commodity Futures Trading Commission’s Commitments of Traders report.
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