Briefly Noted

The US Energy Information Administration raised its near-term natural gas price outlook Aug. 10, as power-sector demand remains strong in the face of rising prices. The EIA now expects Henry Hub spot prices to average $3.42 per million Btu in 2021, up 6.2% from the month-ago outlook, before declining to $3.08/MMBtu in 2022, up 2.7% from the prior outlook. Domestic natural gas consumption should average 82.46 Billion cubic feet per day in 2021, up 0.2% from the prior outlook, with power sector consumption averaging 29.49 Bcf/d, or 35.7% of total consumption, up 0.6% from the prior outlook.. * * * Texas’ grid operator predicts this week’s heat wave will bring near-record electricity demand. Electric Reliability Council of Texas predicts demand will reach 74,375 megawatts on Wednesday, just shy of the record 74,820 MW reached in August 2019, but well below the summer peak demand level of 77,144 MW predicted in May. In June, hot weather combined with 11,000 MW of offline generation brought about calls for energy conservation from the grid operator. Today, the grid operator appears to have more operating reserves to call on, as it reports normal operating conditions. * * * Associated gas production in Texas’s Midland Basin could soon return to its pre-pandemic levels just under 6 Bcf/d -- about 6% of total US dry gas output. Permian gas is outpacing crude oil recovery “because of rising natural gas prices and more demand to support US exports from the region," according to the US Energy Information Administration. The Permian sub-basin’s gas output bottomed at 4.9 Bcf/d in May 2020, well below its 5.8 Bcf/d in October 2020 peak when new oil and gas pipeline takeaway capacity out of the Permian Basin began entering service.