The Energy Buyer's Guide | 08.12.2024
Natural gas futures rise on the back of strong generation demand.
- Natural gas futures were higher last week, pushing back above $2.00 per MMBtu on the front of the curve, with the market posting its most significant weekly gains since June.
- Power generation demand for natural gas posted its highest weekly average of the season, but consumption from that sector was still lower than the same week in 2023.
- Natural gas storage inventories increased by 21-Bcf during the week ended August 2, continuing to erode the surplus to historical benchmarks. (Link)
- Near-term weather forecasts show the first sustained heat wave of the summer in Texas, which could lead to volatility in ERCOT power prices in the coming weeks. (Link)
Natural gas futures turned higher last week, marking just the second week of rising benchmark NYMEX pricing since mid-June. The prompt-month September 2024 contract increased in the each of the final 4 days of the week to finish back firmly above $2.00 per MMBtu. Gains were consistent across the next two seasonal strips, with Winter 2024-25 and Summer 2025 gaining $0.19 and $0.16 per MMBtu, respectively. The Winter 24-25 strip traded as low as $3.00 per MMBtu early in the week before mounting a recovery alongside the prompt contract heading into the weekend.