US natural gas futures fell on Wednesday to the lowest in two weeks on forecasts for milder weather through early November that could reduce demand for gas used both for heating and to generate electricity for cooling. Front-month gas futures fell 9.3 cents, or 2.9 percent, to settle at $3.170 per million British thermal units, the least since October 6.
Despite the forecast for less heating demand, Thomson Reuters projected US gas usage would edge up to 65.8 billion cubic feet per day this week and 66.5 bcfd next week from 65.7 bcfd last week with the expected return to service of the Sabine Pass liquefied natural gas export terminal.
Sabine Pass in Louisiana, which consumes about 1.3 bcfd, was expected to return from a four-week maintenance outage this week. Since the start of October, US power demand has averaged 24.1 bcfd, which is below the record high 25.5 bcfd for the same period last year. Traders said gas usage was down because coal has been the cheaper fuel for many power generators since early September.
But power usage was up from its 30-year normal of 19.5 bcfd after many coal plants retired over the past several years, leaving gas as the only option in some regions. Gas supplies were expected to ease to 76.0 bcfd this week from 77.1 bcfd last week amid low US production and less imports from Canada, before rising to 77.8 bcfd next week with the expected return of the Alliance pipe in Canada, Reuters data showed.
Comments
Comments are closed.