The recapture of power generation demand from coal and expectations for an early start to the US heating season could prompt a pre-winter rally for natural gas prices by October, BNP Paribas said Friday.
Much of the year-to-date increase in gas prices was erased as summer temperatures trended normal to below-normal in key US consuming regions this year, leading to prices below $3.50/MMBtu. But the lower prices have again made gas attractive to utility buyers, BNPP analyst Teri Viswanath said.
"Increasingly favorable fuel economics will encourage heavier utilization of natural gas combined-cycle plants in key regions of the country, ultimately leading electric power demand higher before year-end," she said. That improvement "will likely occur just as the market begins to look ahead to rising heating demand," she added.
