Natural gas futures rose to a 20-month high during early trading on Monday as sentiment remained upbeat amidst receding concerns over US natural gas inventory levels.
On the New York Mercantile Exchange, natural gas futures for May delivery were trading at $4.16 per million British thermal units on Monday.
Last week, the US Energy Information Administration
that natural gas storage had fallen by 94 billion cubic feet (Bcf), above the expected drop of 91 Bcf. Inventories increased by 43 Bcf in the same week a year earlier, while the five-year average change for the week is a build of 4 Bcf.
Total US natural gas storage stood at 1.687 trillion cubic feet (Tcf) as of last week, 32 percent lower than the same time last year and 2.1 percent below the five-year average for this time of year.
Wall Street investment bank Goldman Sachs Group (NYSE:
) announced that it
natural gas prices to average $4.50 per million British thermal units in the second half of 2013, citing increasing US demand and lower production levels.
New EPA standards could push up gas demand
The cost of complying with tougher Environmental Protection Agency (EPA) air-quality standards could spur an increased shift away from coal and toward natural gas for electricity generation, according to a new Duke University study.
Stricter regulations on sulfur dioxide, particulate matter, nitrogen oxide and mercury may make nearly two-thirds of the nation's coal-fired power plants as expensive to run as plants powered by natural gas, the study found.
“Because of the cost of upgrading plants to meet the EPA's pending emissions regulations and its stricter enforcement of current regulations, natural gas plants would become cost-competitive with a majority of coal plants — even if natural gas becomes more than four times as expensive as coal,” said lead author Lincoln F. Pratson, the Truman and Nellie Semans/Alex Brown and Sons professor of earth and ocean science at Duke's Nicholas School of the Environment.