By Tsvetana Paraskova - Jul 11, 2021,
OilPrice.com
U.S. natural gas prices have more than doubled since last year’s pandemic-induced slump. Prices surged in the second quarter of 2021 by 40 percent, registering the largest quarterly rise since the second quarter of 2016.
The U.S. benchmark natural gas price at the Henry Hub has traded above $3.60 per million British thermal units (MMBtu) so far in July. Extreme heat, rising liquefied natural gas (LNG) exports, and lower than usual gas stocks in storage continue to support prices at the start of the third quarter.
Going forward, analysts expect higher volatility in prices as weather models and anticipated heat waves will be one of the key factors in determining price actions. Natural gas consumption in U.S. electricity generation, however, is set to decline this year because of the much higher prices, which make coal more competitive. Coal-fired power generation is set for a short-term recovery this summer as higher prices of coal’s main fossil fuel competitor, natural gas, will discourage parts of gas-fired electricity generation.
Still, natural gas prices are currently at their highest since the middle of December 2018, driven by record U.S. LNG exports, low domestic stock levels, and extreme weather both in the past winter and this summer.
Amid all this, natural gas production in the United States has stayed relatively flat in recent months, due to lower production of associated gas from oil-directed rigs.
https://oilprice.com/Energy/Natural-Gas/Natural-Gas-Prices-Still-Have-Room-To-Run.html