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US Northeast mark gas prices rise on stiffed market fundamentals

A fall in gas production and increasing gas-fired power demand have stretched Northeast gas markets, bracing spot gas prices and contracting base discounts in order to Henry Hub.A gas pricing benchmark for New England, Algonquin city-gates demand has closely eliminated its extensive spread to fund Henry Hub over the past week, reducing its discount by almost 70 cents since July 9 to 2.50 cents on July 15. A rising Algonquin city-gates clarifies the change, with opening settlement information indicating a raise from USD2.99/MMBtu on July 9 to USD3.66/MMBtu on July 15.

To the south, fund spreads in Appalachia have also got in, albeit to a little less extent. Fund EGTS South, earlier known as Dominion South, has witnessed its discount to cash Henry Hub slender to 63 cents in July 15 trading fall of 45 cents since the beginning of July.

An exhilarating amalgamation of escalating demand and lower production has anticipated to be driven by the pricing dynamic.As per S&P Global Platts Analytics data, Northeast gas production amounts have stumbled over 1 Bcf over the past week, falling to a two-week low of 32.4 Bcf on Thursday July 15, 2021. Regional production has averaged 32.7 Bcf/d in the early 15 days of July, dropped by 913 MMcf/d from the same period in June.

The major production thrashings were concerted in West Virginia and Northeast Pennsylvania, with lesser losses seen in southern Pennsylvania and Ohio.Platts Analytics anticipated Northeast production to stay lower than 33 Bcf/d through July 22 that would be the largest period of sub-33 Bcf/d production since the February’s 12-day streak.

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