Natural gas drops most in 2 weeks as supply gain tops forecasts

Weather Outlook

The high in New York on May 27 may be 66 degrees Fahrenheit (19 Celsius), 8 lower than the usual reading, and Dallas may drop to 2 below normal at 85 degrees, according to AccuWeather Inc. in State College, Pennsylvania.

“The real change this week is those weather maps turned decidedly warmer for the balance of May and most importantly we are seeing that heat begin to move into Texas,” Viswanath said. Texas and the Southeast states account for nearly half of U.S. summer electric power demand, she said.

Gas consumption typically slumps after the peak heating season and before hot weather drives demand for electricity to run air conditioners. About 50% of U.S. households use gas for heating, according to the EIA, the statistical arm of the Energy Department. Power generation accounts for 33% of gas consumption.

Production Report

Gross gas production in the lower-48 states climbed 1.3% to 73.22 billion cubic feet a day in February from a revised 72.3 billion in January, the monthly EIA-914 report on April 30 showed. New wells brought online at shale deposits such as the Marcellus in the Northeast and the Bakken in North Dakota contributed to the biggest percentage gain since October 2011 and the first increase in three months.

The EIA estimates that U.S. marketed production in 2013 will set a record for the sixth straight year, climbing 1% to 69.9 billion cubic feet a day, according to the May 7 Short-Term Energy Outlook. Consumption will increase to 70.17 billion cubic feet a day from 69.68 billion.

The boom in oil and natural gas production helped the U.S. cut its reliance on imported fuel. The U.S. produced 84% of its own energy in 2012, the most since 1991, EIA data show. The measure of self-sufficiency rose to 88% in December, the highest since February 1987.

Bloomberg News

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