As the discount of October to November futures narrowed 0.2 cent to 7.6 cents, October delivery for Natural gas rose by 6.1 cents to $3.738 per million British thermal units. On the other hand, October gas traded 30.3 cents below the January contract. In yesterday’s trading, natural gas prices went up amidst the news that tropical Storm Ingrid was nearing Mexico.
Natural gas futures for delivery in October were doing pretty good on the New York Mercantile Exchange as they traded at USD3.7370 per million British thermal units. Traders are waiting for the government data which will be coming on Sept. 19 and is expected to show inventories’ rise by 62 billion cubic feet in the week ended Sept. 13.
According to market observers, inventories’ rise by 62 billion cubic feet in the week ended Sept. 13 is less when compared with the five-year average gain of 74 billion. On the other hand, the U.S. Energy Information Administration in its weekly report on Thursday divulged that natural gas storage in the U.S. in the week ended Sept. 6 rose by 65 billion cubic feet.
Its 65 billion cubic feet storage of the natural gas is below market expectations as market observers were expecting an increase of 66 billion cubic feet. Additionally, it is a major failure in the sense that inventories increased by 27 billion cubic feet in the same week a year earlier. Demand for natural gas is expected to rise as coal plants are under scrutiny.
The Environmental Protection Agency Proposals for Gas Plants and Coal Plants
Gas plants and coal plants are under strict scrutiny for their pollution levels. The Environmental Protection Agency issued its plan for new plants in 2012 wherein it set the same standard for coal and natural gas plants of 1,000 pounds of carbon-dioxide per megawatt hour to control pollution levels.
The agency had then admitted that whereas a new, efficient natural gas plant can meet that standard, a coal plant’s emissions are at least 1,800 pounds per megawatt hour which is a major snag.
If a lot of restrictions are laid on coal plant the requirement for gas plant will increase and this may also increase the demand for natural gas in return. According to estimates gas output will climb 2.3 percent, or 1.5 billion cubic feet a day, to average 67.8 billion cubic feet a day in 2014.
To contact the reporter of this story: Jonathan Millet at firstname.lastname@example.org