Good news continues for the nation's natural gas consumption. The U.S. Energy Information Administration released its Natural Gas Weekly Update and the results indicated a jump in demand for natural gas in the eastern part of the U.S. In fact, Bentek Energy noted the overall consumption in this region this spring surpassed the rates seen in years previous, according to EIA.
"Higher temperatures contributed to a higher demand for natural gas."
Above average temperatures drive the need for natural gas
According to the National Oceanic and Atmospheric Administration, the Northeast experienced its warmest May and the rest of the Eastern U.S. also recorded above average temperatures this spring. The Southeast region experienced above average temperatures this May as well.
These higher temperatures contributed to a more substantial demand for natural gas – particularly in the electric power sector, or the power burn.
Prices and storage for natural gas increase
For the week ending June 17, the price of natural gas prices mixed. Prices started at $2.29/ million British thermal units the previous week and stabilized at $2.93/MMBtu by June 17. This increase comes as welcome news to natural gas fracking operations.
Storage for natural gas also rose on a year-over-year basis. According to EIA's weekly update, the storage needs increased 42.9 percent higher than the previous year and 1.9 percent more than the five-year average for the week ending June 17.
The gas consumption for the U.S. rose 3.4 percent for the week ending June 17. The power-sector consumption saw an increase of 8.2 percent.
MarketWatch also echoed the increasing demand for natural gas along the eastern part of the U.S.
"The East Coast has been baking," said Richard Gechter, Jr., principal and president of Richard W. Gechter Natural Gas Consulting, according to MarketWatch. "We have not really had a break in the temps and that begins to stress the power folks."
The weather appears to be a primary driver for the rising demand.
Rig count falls again
According to Baker Hughes, the fracking rig count for the U.S. for the week ending June 19 decreased to 857. This is down two from the previous count on a year-over-year basis.
This continual fall indicates existing rigs will have to meet the demand for natural gas. This is especially true as the demand continues to rise specifically for power generation.
FB Industries Inc. – The Unsurpassed Solution for Frac Sand Handling & Storage.