Natural gas price rises as cooler weather raises demand hopes oil up

Oct 6, 2019 zlxsfutf

Natural gas price rises as cooler weather raises demand hopes; oil up slightly Battered natural gas prices are getting a bit of a break as cooler spring weather raises expectations that demand may improve.Natural gas rose six cents to finish at US$2.186 per 1,000 cubic feet in Friday trading. That’s up nearly 15 per cent from April 19 when the price hit the lowest level in more than a decade at US$1.907 per 1,000 cubic feet.The price has plunged this year as a natural gas production boom created a glut of supply and demand dropped amid a mild winter.Now, some in the market are suggesting demand will strengthen, which would help boost prices.In addition, utilities have been substituting cheaper natural gas for coal to generate electricity.As much as six billion cubic feet a day of natural gas has replaced coal-fired power generation this year, said Ron Denhardt, an analyst with Strategic Energy & Economic Research. Consumption on an annual basis is about 66 billion to 67 billion cubic feet a day.In addition, some energy companies have cut production because low prices can make it unprofitable to drill for some types of natural gas.Yet, several analysts believe any rally will be short-lived.With May upon us, any pick-up in demand for heating will be brief. About 70 per cent of U.S. demand for natural gas comes in the winter to heat homes and businesses.Natural gas inventories continue to build. Analysts say that underground storage could be filled to the brim by fall without additional production cuts or an extremely hot summer that boosts electricity demand for cooling.“It’s fundamentally a disastrous market,” Denhardt said. “I can’t see any turnaround of any significance before November, December of this year.”PFGBest analyst Phil Flynn said there has to be an even bigger drop in price to force companies to cut more production. He speculated that the price will test an all-time low of US$1.35 per 1,000 cubic feet.In other energy trading, oil prices rose slightly as traders shrugged off a report that the U.S. economy grew more slowly in the first three months of the year as governments spent less and businesses cut back on investment but consumers spent at the fastest pace in more than a year.The Commerce Department said Friday that the U.S. economy grew at an annual rate of 2.2 per cent in the January-March quarter, compared with three per cent in the final quarter of 2011.Benchmark West Texas Intermediate crude oil rose 38 cents to end at US$104.93 per barrel in New York. Brent crude, used to benchmark varieties imported by U.S. refiners, fell nine cents to US$119.83 a barrel in London.Heating oil lost 1.37 cents to end at US$3.1807 a U.S. gallon (3.79 litres) and gasoline futures rose 2.29 cents to US$3.2062 a gallon.(TSX:ECA), (TSX:IMO), (TSX:SU), (TSX:HSE), (NYSE:BP), (NYSE:COP), (NYSE:XOM), (NYSE:CVX), (TSX:CNQ), (TSX:TLM), (TSX:COS.UN), (TSX:CVE) by News Staff Posted Apr 27, 2012 3:29 pm MDT AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email

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