From Reuters:
* Cold forecasts, particularly for Midwest, support prices
* Front futures hit highest since July 2011
* Coming up: Baker Hughes rig data, CFTC trade data Friday
By Joe Silha
NEW YORK, April 12 (Reuters) - U.S. natural gas futures
moved higher on Friday for a third straight day, with cold
Midwest weather forecasts for the next week and recent declines
in inventories to below normal levels driving the front contract
to a new 20-month high.
Traders said persistent late-winter cold, particularly for
the Midcontinent region, has helped drive the front-month
contract up about 35 percent over the last two months.
Some traders also viewed Thursday's 14 billion cubic feet
weekly inventory draw as supportive for prices, noting stocks
typically build slightly during that week.
The U.S. Energy Information Administration report showed
that total domestic gas inventories fell last week to 1.673
trillion cubic feet, 32 percent below last year's record highs
for that time and 4 percent below average.
The sharp drop in stored gas over the last two months, also
backed by above-average nuclear plant outages, helped tighten
supplies and prompted some analysts to raise price expectations
for this year.
At 12:10 p.m. EDT (1610 GMT) front-month gas futures
on the New York Mercantile Exchange were up 8.4 cents, or 2
percent, at $4.223 per million British thermal units after
climbing early to a new 20-month high of $4.24....
...MOREFour bucks is an important number, where power generators are solidly profitable switching to coal battling the price point shale operators need to make many wells profitable (as high as $5 to 6 for some)
From Coal Guru:
According to a recent report released from Genscape’s Generation Fuel Monitoring Service, coal fired power generation rose 21% in March 2013 compared to March 2012. The report links the rise of coal-fired generation to rising prices for natural gas.
The increase of coal fired power generation made up for a loss in generation from natural gas and renewable energy, the report states. Natural gas-fired power generation dropped 11% from March 2012 levels, while renewable energy generation decreased 14% in March 2013 as compared to March 2012.
Genscape states that over the past year, gas prices have risen 60%, while coal prices have only risen about 2%, causing coal-fired generation in March to be 53 percent higher than natural-gas fired generation. Genscape analyst Mr Stephen Maestranzi said that “as gas prices have recently reached USD 4.00/MMBtu, the economics behind fuel switching are dramatically different than last year.”
According to the report, the year over year hit in renewable energy was largely driven by weaker hydropower output in the Northwest US, where Genscape’s monitors on hydro facilities saw a 36% decrease on significant declines in snow water equivalent.
Source - www.power-eng.com
