Natural gas prices rise on power burn surge

Natural gas prices rise on power burn surge rose on the week, spurred by higher power burns in the US for this time of year as late-night warmth especially propelled Americans to crank up the cooling at home despite fall weather being just a week away.

But the market's nexus with mid-$2 pricing was a challenging bond to break.

At Friday's close, the most active October gas contract on the Mercantile Exchange's Henry Hub settled at $$2.6440 per mmBtu, or million metric British thermal units, down -6.4 cents, or 2.4% on the day.

Power burns - a major determinant of natural gas pricing - totaled 42.1 billion cubic feet per day for the Sept. 8-14 week, up 6.3 bcf/d for the compare week of a year ago.

For Sept. 14 alone - the last available day for reading - the power burn was up 6 bcf/d, compared to the year ago reading of 33.8.

The surge in power burns was the clearest indication yet that lingering warmth from the waning days of summer was still helping drive demand for natural gas, said analysts, although fall will officially begin on Sept. 23.

Despite that bullish factor, the biggest weight on the market remained worries that production could ramp up again with this year's drop in gas rigs - which indicate future output - seeming to have bottomed out. Energy services firm Baker Hughes said natural gas rigs rose by eight per cent in the past eight months.

Despite a fierce summer of power burns, the company's stock remained up 16% on the year at 3.205 trillion cubic feet.

The two have kept the Henry Hub's most active contract not far from the mid-$2 level which natural gas has been stuck at since the start of 2023 - with the occasional run to $3 or thereabout.