U.S. natural gas prices rose by 3% on Monday following forecasts that weather is set to remain hotter than expected through early September, particularly in Texas. This historically warmer weather has propelled an increased demand for air conditioning, thereby spurring an increase in natural gas demand.
Power usage in Texas was on track to hit an 11th all-time high this summer on Monday with usage expected to rise to 85,605 megawatts (MW) throughout the day, the state’s grid operator, the Electric Reliability Council of Texas (ERCOT), reported. This is largely due to air conditioning usage across homes and businesses. On August 10, ERCOT recorded an all-time high of 85,435 MW.
Last year, natural gas-powered plants accounted for 49% of the State of Texas’ power, with the remaining electricity supply coming from wind (22%), coal (16%), nuclear (8%), and solar (4%) energy. Front-month gas futures for September on the New York Mercantile Exchange rose by 6.8 cents or 2.7%.