With the heat wave that recently swept across the United States, Canadian natural gas companies saw an increase in demand as Americans ran their air conditioners longer. GWC Valve International has seen this interaction between weather patterns and the natural gas industry before.
With record-breaking temperatures, the heat wave that swept across the United States prompted many homeowners to crank down their air conditioning units – and these units to work overtime to combat the heat. As a result, the demand for natural gas spiked. Bloomberg reports that Canadian natural gas companies saw an increase of 2.6% in sales, putting demand at the highest it has been since 25 January of this year. GWC Valve International has seen this situation before and reminds the general public that the more severe the temperatures — hot or cold — the higher the demand for natural gas will be.
According to the article, states stretching from Missouri east toward Delaware experienced temperatures up to 14°F above seasonal averages. On 22 June, United States natural gas inventories were only 25% above the five-year average, down 35% from 30 March numbers.
Kyle Cooper, the Director of Research at IAF Advisors, remarks, "It’s warm outside; they’re still burning quite a bit of natural gas in the electricity sector in particular. That storage overhang is being reduced at a pretty rapid pace."
The surge in natural gas demand has resulted in an increase in Canadian sales. The article reports that Alberta’s August gas delivery has increased by 5.75 cents per gigajoule. In fact, since the end of March, Alberta gas prices have risen 40%. This is a turnaround from the 12% that the sector fell at the beginning of the year.
GWC Valve International has worked on initiatives that have fallen under similar circumstances.
Although natural gas demand is a regular topic of conversation in many circles and publications, a portion of the general public does not realize how connected weather patterns and natural gas prices are. When temperatures drop or increase sharply, such as during a heat wave or a cold front, homeowners turn up their air conditioning or heating systems to combat the extreme weather. A large portion of these systems is powered by natural gas.
Although the heat wave has passed, there are still several summer months left in this year and another surge in demand may occur. Similarly, a cold winter will also increase demand and prices.