In this list
Natural Gas

NYMEX October natural gas futures spike as demand rises and production falls

Energy | Electric Power | Energy Transition | Emissions | Natural Gas | Natural Gas (North American)

US natural gas utilities look to turn climate challenges into opportunities

Energy | Natural Gas | Natural Gas (North American) | Oil | Crude Oil

Platts Upstream Indicator

Energy Transition | LNG | Natural Gas

7th Asia LNG and Hydrogen Gas Markets Conference

Energy | Natural Gas | Coal | LNG | Emissions

GASTECH 2021: Gas market confab produces few deals as investors weigh volatility

Agriculture | Grains

Expectation vs reality: The case of the large corn crop that grew small in Brazil

NYMEX October natural gas futures spike as demand rises and production falls

Houston — NYMEX October natural gas futures spiked in morning trading Tuesday, on a near-term rise in demand and a drop in production.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

As of 11:00 am EDT (1500 GMT), the front-month contract was trading at $2.881/MMBtu, up 6.7 cents, after moving between $2.811/MMBtu and $2.886/MMBtu so far in the session.

"Prices are getting near-term support due to late summer cooling demand," said Gene McGillian, a senior analyst at Tradition Energy.

The upward mobility in prices for two straight days comes as total US demand is set to climb to 80.9 Bcf Tuesday, according to data from S&P Global Platts, after averaging 77.4 Bcf/d in the last seven days.

However, demand might not be able to hold the current highs as temperatures move back to seasonal norms. Over the next seven days, Platts Analytics projects demand to drop and average 77 Bcf/d.

The storage deficit combined with production decline also drove a part of Tuesday's gains so far in morning trading.

Current national gas inventories sit at 2.636 Tcf, 18.4% below the five-year average of 3.232 Tcf, according to data from the US Energy Information Administration. However, the storage deficit did very little to drive prices up from the beginning of summer to date, on expectations that historically high production levels will be able to offset winter demand.

"Prices have moved between the $2.75/MMBtu and $3.05/MMBtu range so far," said McGillian.

"The market has found a sweet spot," he said, with demand for cheap gas for power burn and strong production holding prices on either side of the range.

On the supply side, US dry gas production is estimated to drop 1.6 Bcf/d and stand at 82.4 Tuesday, after hitting a new record high of 84 Bcf the day prior, according to data from Platts Analytics. The most significant drop is likely to come from the Northeast, a day-on-day drop of 500 MMcf, followed by Texas, Southeast and Midcontinent production regions.

--Veda Chowdhury,

--Edited by Derek Sands,