Energy Prospectus

Opening Prices:
> WTI is down 17c to $43.22/Bbl, and Brent is down 20c to $45.44/Bbl.
> Natural gas is up 5.7c to $2.518/MMBtu.

Today is the last day of trading for the September natural gas contract. With October becoming the front month it will open much higher tomorrow and my guess is that it moves up to $2.70 quickly as weather is bullish for gas demand and we know a big surge in LNG demand is coming in October & November.

Why are natural gas prices increasing so fast when we have so much gas in storage?

> Increased electricity demand amid higher summer temperatures and lower natural gas prices sent natural gas-fired power generation in the Lower 48 states to a record 36 gigawatts (GW) on July 27, the Energy Information Administration (EIA) said on Wednesday. The so-called natural gas power burn­—the natural gas consumed by power plants—hit a daily record of 47.2 billion cubic feet (Bcf) on the same day, the EIA has calculated, based on S&P Global Platts estimates.

> Pipeline natural gas exports from the United States to Mexico are exceeding 6 Bcf/d so far in August, according to preliminary estimates by Genscape, Inc. This is up from the 5.3 Bcf/d average reported by the U.S. Department of Energy for the first quarter of 2020.

> LNG exports are now expected to double (increasing over 4 Bcf per day) from August to October.

> Hurricane Laura caused over 1.5 Bcfpd of natural gas supply to be shut-in this week.

Most important: EIA's current forecast of U.S. natural gas production for 2021 is below what just domestic demand for gas was in 2019.