Natural gas futures hit a two-week high on Friday, May 17, following forecasts of above the average temperatures during the next two weeks in the central parts of the United States.
When warm weather is expected, natural gas surges as increased electricity demand to power air-conditioning calls for more supply of the fuel, which is used for a quarter of the U.S. electricity generation. Mild temperatures have the opposite effect. Consumption usually declines in autumn before picking from November through March. According to the Energy Information Administration, power generation accounts for 32% of U.S. gas demand and 50% of U.S. households use gas for heating.
The fuels price settled on the New York Mercantile Exchange at $4.059 per million British thermal units for the previous week, surging 3,2% and marking a two-week high. On Thursday, May 16, gas price tumbled 3,4% following a report by the U.S. Energy Information Administration, which showed an above-the-expectations increase in the Natural Gas Storage Indicator. The storage rose by 99 billion cubic feet, 4 billion higher than the 95 billion prediction.
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