NEW YORK: US natural gas futures rose about 3% on Monday on forecasts for low wind power, warmer weather and higher air conditioning demand over the next two weeks than previously expected, rising exports to Mexico and a jump in global gas prices.
The amount of US power generated by wind so far this week dropped to just 6% of the total versus a recent high of 12% during the week ended May 12, according to federal energy data. The amount of power generated by gas has risen to 44% so far this week, up from around 40% in recent weeks.
When power generators burn more gas to produce electricity to meet rising air conditioning use, there is less of the fuel available to go into storage for the peak winter heating season. That helps boost prices. That US price increase occurred despite near record output and a drop in the amount of gas flowing to liquefied natural gas (LNG) export plants due to maintenance. Front-month gas futures for July delivery on the New York Mercantile Exchange rose 7.3 cents, or 3.4%, to settle at $2.245 per million British thermal units (mmBtu).
Even though gas prices rose about 3% last week, speculators cut their net long futures and options positions on the New York Mercantile and Intercontinental Exchanges for the first time in three weeks, according to the US Commodity Futures Trading Commission’s Commitments of Traders report.
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