Natural Gas Hits 13-Year High as Biden Pushes Solar Power
The price of natural gas futures — the contracted price for the product at future dates — hit a 13-year high, spurred by hot weather coming over the summer and lower production rates, in part as a result of President Joe Biden’s anti-fossil fuel policies. And consumer demand could also outpace supply.
Biden on Monday ordered emergency measures to boost supplies to U.S. solar manufacturers and put in place a two-year tariff exemption on solar panels from Southeast Asia, which could include products from China.
The oil dot com website reported on the development:
On Monday, Henry Hub natural gas futures were up nearly 10 percent at a 13-year high. At 5 p.m. EST, Henry Hub prices for July contracts sat at $9.368, up 9.91 percent. August contracts were at $9.350, up 9.87 percent.
In its 2022 outlook released in late May, the Federal Energy Regulatory Commission (FERC) projected that U.S. demand for natural gas would outpace supply this summer. As reported by NGI, FERC sees U.S. dry natural gas production increase by 3.4 percent over the summer months, compared to a projected 4.8 percent increase in consumption during that same period.
Over the winter period from November 2021 through March 2022, 2,264 billion cubic feet of natural gas was withdrawn from U.S. storage, according to the Energy Information Administration (EIA). That withdrawal is 10 percent higher than the previous five-year average. Already this winter, U.S. demand for natural gas exceeded supply by 14.9 billion cubic feet per day.
The report also cited the skyrocketing exports of liquefied natural gas (LNG) from the U.S. Gulf Coast, which diverts the domestic supply.
The report also included remarks from energy analyst Eli Rubin to Natural Gas Intelligence. He said increasing demand for natural gas for air conditioning in the coming weeks “could ignite another substantial rally in Nymex futures into mid-summer.”