U.S. natural gas prices fell on Friday afternoon on the expectation that temperatures in the United States are set to cool off soon.
Natural gas futures fell to $8.076/MMBtu (-2.79%) as the Global Forecast System predicted that cold weather was in store next week for the Great Plains and the Eastern United States, and the week following in the Mountain West and East Coast.
Today's natural gas prices are still more than double what they were this time last year, double the levels that it started the year with, and the highest in over a decade.
Natural gas prices also were pushed down by the EU's endorsement of companies opening up special ruble accounts at Gazprombank to pay for Russian gas.
Even with EU members finding a path to continue purchases of Russian gas, the supply and demand balance for natural gas is expected to remain tight for the remainder of the summer, although U.S. production is more than it was this time last year.
The United States has been exporting natural gas to gas-hungry Europe as the latter looks to decrease its reliance on Russian gas supplies. Those higher exports have helped to push prices higher, combined with unseasonably warm temperatures in parts of the United States, adding to the call for cooling. Adding to the list of things pushing natural gas prices above the $8 market are nat gas inventories which are 20% below where they were this time last year.
The dip in today's natural gas prices is expected to be short-lived, however, with the EIA forecasting that natural gas delivered to electric generators will average almost $9 MMBtu this summer between June and August.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More
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