It would be easy to think that, in summer, the call for natural gas might be in decline. But with so many uses, reducing one might well lead to increasing another, like squeezing a balloon. The United States Natural Gas Fund (UNG) was paradoxically down in Friday afternoon’s trading, even as reports emerged that the Canadian wildfires were prompting a whole lot more natural gas burning than normal.
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Basically, the green energy methods that so many places turn to don’t work so well when there are huge clouds of wood smoke in the air, and with somewhere around 400 wildfires currently burning in Canada, there’s a whole lot of it. That’s hitting solar panel systems hard and also doing a number on wind turbines. That leaves power plants to turn to natural gas to provide a ready source of uninterrupted power. New England, for example, noted that gas-fired plants in the region were putting out 61% of the power generated, well above the average of 52% seen back in 2022.
That wasn’t the only thing putting pressure on natural gas consumption rates; the recent bout of cooler overnight temperatures has sent natural gas prices downward, noting a Natural Gas Intelligence report. Interestingly, just two days prior, Natural Gas Intelligence released a report noting that natural gas prices would likely rise this summer thanks to rising demand and flat production rates. A look at spot prices throughout the U.S. showed that most locales were down, with the exception of Detroit and AECO in Canada.
A look at the last five trading days for the UNG ETF shows just how volatile prices have been. While prices for the ETF remained within a roughly $0.30 range for the last five days, within that range, there has been frequent movement. Today’s movement, however, has been largely downhill.
