Natural gas futures fell 4% on Wednesday (Getty)
decreased energy prices The US economy in general on Wednesday, as futures contracts fell for natural gas 4% to its lowest level in 4 weeks, while production is heading to record a monthly record, and while global oil and gas prices have plunged.
The price of a barrel of US oil futures contracts at $81.94, down $4.94, or 5.69%, according to Archyde.com data.
Natural gas contracts for October delivery ended the trading session on the NYMEX, down 30.3 cents, or 3.7%, to settle at $7.842 per million British thermal units, the lowest closing level since August 9.
But in the western United States, spot selling prices jumped to a two-year high, while California avoided power outagesThe demand for gas reached a record high.
The drop in gas futures came as the Freeport LNG export plant in Texas continues to shut down, leaving more US gas for utility companies to pump into storage for the upcoming winter.
Freeport is the second largest LNG export plant in the United States, and was consuming about two billion cubic feet per day of gas before it closed on June 8. Work is expected to resume at least partially in early to mid-November.
US gas futures are still up about 110 percent so far this year, while higher prices in Europe and Asia keep demand for US LNG exports strong.
Gas is traded around $61 per million thermal units in Europe and around $55 in Asia. This represents a 12% drop in European gas prices.
In addition, Russian gas giant Gazprom said today, Wednesday, that natural gas deliveries from Russia to the European Union have fallen 48% so far this year, and that the total drop is 49% if the United Kingdom is included.
Today, Russian President Vladimir Putin threatened to cut off all energy supplies to the European Union if the bloc imposed a ceiling on the price of Russian gas, which raises the risks of gas quotas distribution in some of the world’s richest countries this winter.
Electricity consumption in America will reach a record high in 2022
On the other hand, the US Energy Information Administration said today, Wednesday, that electricity consumption in the United States will rise to a record level in 2022 due to increased economic activity and high summer temperatures.
The government agency expected that demand for electricity will jump to 4029 billion kilowatt-hours in 2022 from 3930 billion kilowatt-hours in 2021, and then decline to 4013 billion kilowatt-hours in 2023 with mild temperatures.
This compares to an 8-year low of 3,856 billion kWh recorded in 2020, when the coronavirus pandemic curbed demand, and an all-time high of 4,003 billion kWh in 2018.