Investing.com -- U.S. natural production neared record highs in the just-ended week while some of the heat that has been baking Texas and other southern U.S. states came off a little, prodding market participants to price the fuel down further towards mid-$2 levels.
Most-active August gas on the New York Mercantile Exchange’s Henry Hub fell 5.2 cents, or 2%, to settle at $2.657 per mmBtu, or metric million British thermal units. That compared with last Monday’s high of $2.936, which marked the loftiest level for a front-month gas contract on the Henry Hub since March.
Wednesday’s correction came as market participants awaited the delayed weekly release of the gas storage report from the U.S. Energy Information Administration. The report, routinely published on a Wednesday, would appear on Thursday this time due to this week’s 4th of July U.S. Independence Day holiday. The report will allow traders to gauge demand for cooling during the week ended June 30.
PowerBurn up but southern heat dissipates as well
PowerBurn, a leading component of natural gas demand, was up 0.47 billion cubic feet per day, or bcf/d, on Tuesday, Houston-based energy markets advisory Gelber & Associates said.
But “observed temperatures in the South Central and Central region at large continue to cool slightly in comparison to the blistering heat felt in previous weeks,” Gelber reported, giving one reason for the price consolidation.
Also, while gas production fell by 0.1 bcf/d to 101.2 bcf/d the previous day, during this week’s holiday break, output came in at just beneath 0.15 bcf/d at one point — almost matching April’s record highs.
Extended maintenance at gas processing plants “should no longer be a factor at play for production levels for the foreseeable future,” Gelber added.