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Natural Gas Fundamental Forecast – August 17, 2016

By:
Barry Norman
Published: Aug 16, 2016, 13:31 UTC

Natural Gas added 6 points to trade 2.596 near the bottom of its trading range as summer air conditioning season dwindles down. Forbes reported that the

Natural Gas Fundamental Forecast – August 17, 2016

Natural Gas added 6 points to trade 2.596 near the bottom of its trading range as summer air conditioning season dwindles down. Forbes reported that the U.S. Energy Information Administration (EIA) reports natural gas tied coal power last year with each powering 33 percent of the U.S. electricity mix. The decline of coal power during the past few years has been remarkable considering coal powered approximately 50 percent of America’s electricity as recently as 2008. Newly released EIA data indicate coal power is trailing natural gas by a substantial margin this year for the first time in history. So far this year, natural gas has held its 33-percent electricity share while coal power has declined to 27 percent. In less than a decade, coal power has lost nearly half its U.S. electricity market share.

The amount of electricity produced by natural gas hit 4,950 gigawatt-hours per day in July, 9 percent higher than the previous record set in July 2015, according to the Energy Information Administration.

“The record natural gas-fired generation was driven by competitive economics compared with coal … and by warmer-than-normal temperatures that boosted overall electricity generation,” EIA said August 9 in its Short-Term Energy Outlook.

Much of the growth came in the Midwest and South, the agency said. Generation from natural gas in July skyrocketed by 55 percent—an additional 209 GWh/day—in the Midwest, compared with July 2015.

In the South, natural gas generation grew by 12 percent—an additional 313 GWh/day—compared to July 2015, EIA said.

Natural Gas Weekly Weather Outlook (www.natgasweather.com)

Aug 11 – Aug 17: Hot upper level high pressure dominates the south-central US, including Texas, where highs of 90s to 100s persist. The ridge has expanded to cover the Great Lakes and Northeast with upper 80s into the 90s across major cities such as Chicago and NYC to bring a return too strong nat gas demand. The South has cooled several degrees due to heavy showers from a stalled tropical disturbance. A weather system over the Plains will bring showers and cooling to the central US this weekend. As next week progresses, the warm upper ridge will strengthen to dominate much of the southern 2/3rds of the US, while mostly comfortable set up over the northern third. Overall nat gas demand will be HIGH the next 7-days.

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