Natural gas-fuelled power generation in the United States reached its highest daily level at 41 Bcf/day on July 20 – just a tick lower than the 2016 peak of 42 Bcf/d seen on August 11 last year. Higher gas prices relative to last summer explain part of the decrease; but PointLogic Energy analysts stressed that “although power burn in 2017 is lower than in 2016, it is still relatively high compared with the previous five-year average for that period.”
Strong storage withdrawals, as well as the tightening spread at Appalachian gas pricing hubs Dominion South Point (Dom SP) and Columbia Gas (TCO) have not been weather-driven in winter 2016/17. The narrower Dom SP/TCO spread, according to PointLogic Energy, was rather caused by slower than expected production growth, coupled with a rise in take-away capacity from storage due to rising demand for natural gas in the Northeastern United States.
Jun 22 – US natural gas futures have reached a 9-month high – with the July frontmonth on NYMEX hovering around $2.75/mmBtu – as record temperatures, particularly in the Southwest, saw gas demand from electric utilities surge. Government projections anticipate an all-time high of gas-burn for power generation, while gas deliveries at the start of this week already surpassed 34.3 Bcf, according to PointLogic Energy data.