Related News
Hot weather outlook again boosts natural gas
Source: Agencies |
July 31, 2012, Tuesday
|
Online Edition
Online Edition
AS the temperature keeps rising, so does the price of US natural gas.
Natural gas futures in New York have surged 69 percent since hitting a 10-year low this spring. Power plants are burning more natural gas for electricity as homes and businesses crank up the air conditioning. And natural gas companies are finally cutting back after a production boom that pushed supplies this winter to the highest level on record.
The price jumped another 6.6 percent yesterday after forecasters predicted an especially toasty August, with unseasonably warm temperatures throughout the Midwest. Natural gas ended the day at US$3.214 per 1,000 cubic feet, a high for the year.
"As long as we see strong cooling demand, prices are going to go higher," said Gene McGillian, a broker and analyst at Tradition Energy.
Still, natural gas is about 35 percent cheaper than at this time last year. And the recent jump in prices probably won't impact utility bills.
Electricity rates are shielded from price spikes in a couple of ways: Utilities lock in gas prices for years at a time to protect themselves from quick shifts in price. And in many states, rates are set by regulators every year or two.
The rise in natural gas has other impacts, however.
As it gets more expensive, utilities will likely burn more coal, independent petroleum analyst Stephen Schork said. Schork noted that natural gas was cheaper than coal from February to May, making it the preferred fuel source for many utilities.
"This is no longer the case," Schork said. Coal is now cheaper than natural gas.
Natural gas prices have been climbing as temperatures rise. This year saw the second-warmest April through June period on record in the US Many utilities burn natural gas to generate electricity, and electricity demand jumps during a heat wave as power customers run their air conditioners more often.
Meanwhile, natural gas producers in the US have been shutting down natural gas drilling operations as they focus on more profitable oil wells. The number of natural gas rigs has been declining every month since October, and production has been falling this year.
In other futures trading, US crude prices fell by 35 cents to US$89.78 per barrel in New York. Brent crude, which sets the price for imported oil, lost 27 cents to end at US$106.20 per barrel in London.
Heating oil lost 1.04 cents to end at US$2.8791 per gallon while wholesale gasoline added 4.9 cents to finish at US$2.9368 per gallon.
Natural gas futures in New York have surged 69 percent since hitting a 10-year low this spring. Power plants are burning more natural gas for electricity as homes and businesses crank up the air conditioning. And natural gas companies are finally cutting back after a production boom that pushed supplies this winter to the highest level on record.
The price jumped another 6.6 percent yesterday after forecasters predicted an especially toasty August, with unseasonably warm temperatures throughout the Midwest. Natural gas ended the day at US$3.214 per 1,000 cubic feet, a high for the year.
"As long as we see strong cooling demand, prices are going to go higher," said Gene McGillian, a broker and analyst at Tradition Energy.
Still, natural gas is about 35 percent cheaper than at this time last year. And the recent jump in prices probably won't impact utility bills.
Electricity rates are shielded from price spikes in a couple of ways: Utilities lock in gas prices for years at a time to protect themselves from quick shifts in price. And in many states, rates are set by regulators every year or two.
The rise in natural gas has other impacts, however.
As it gets more expensive, utilities will likely burn more coal, independent petroleum analyst Stephen Schork said. Schork noted that natural gas was cheaper than coal from February to May, making it the preferred fuel source for many utilities.
"This is no longer the case," Schork said. Coal is now cheaper than natural gas.
Natural gas prices have been climbing as temperatures rise. This year saw the second-warmest April through June period on record in the US Many utilities burn natural gas to generate electricity, and electricity demand jumps during a heat wave as power customers run their air conditioners more often.
Meanwhile, natural gas producers in the US have been shutting down natural gas drilling operations as they focus on more profitable oil wells. The number of natural gas rigs has been declining every month since October, and production has been falling this year.
In other futures trading, US crude prices fell by 35 cents to US$89.78 per barrel in New York. Brent crude, which sets the price for imported oil, lost 27 cents to end at US$106.20 per barrel in London.
Heating oil lost 1.04 cents to end at US$2.8791 per gallon while wholesale gasoline added 4.9 cents to finish at US$2.9368 per gallon.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
