Released June 18, 2024 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--While a major heat wave settles across inland North America, mariners in the Gulf of Mexico need to be alert for gale-force winds and rough seas, forecasters said.
The North American energy sector could be facing its first major test since winter 2023-24. More than 70% of the United States saw sub-freezing temperatures in January, causing a surge in natural gas demand and calls for energy conservation.
Natural gas demand in January was on pace to break a record set in 2022, when Winter Storm Elliot prompted national alerts and caused at least 40 deaths.
Summer doesn't officially begin until June 20, but the Electric Reliability Council of Texas (ERCOT) (Austin, Texas) had already warned in early June of a 12% chance of rolling blackouts in August as electric demand, driven by high temperatures, high humidity, robust demand growth and other factors, could overtake supply. For more on that, see June 18, 2024, article - Was $10 Billion Enough? Texans Face Another White-Knuckled Summer.
It might not take that long. The National Weather Service on Monday said the first major heat wave of the year has already descended on much of the Midwest, Great Lakes, Mid-Atlantic and Northeast.
In Sugar Land, it's relatively cool by Texas standards, with highs topping out in the low 90s and major rains expected. It's the opposite in the Chicago metropolitan area, with the heat index topping out in the low triple digits.
More than 60 million people in the United States are under some form of heat advisory this week, the National Weather Service said.
The U.S. Department of Energy is already expecting a surge in demand through September given expectations of a warm summer. For just June, so-called cooling degree days, an indicator of air conditioner use, is 17% higher than June last year and 5% more than the entire summer of 2023.
Natural gas accounts for about 40% of the electricity on the grid. Henry Hub, the U.S. benchmark for the price of natural gas, was trading at $2.80 per million British thermal units (MMBtu) on Monday, some 32% higher than the May average. Natural gas inventories are expected to fall from 24% above the five-year average to 6% above the five-year average by October 31, which marks the end of the summer injection season.
Elsewhere, the National Weather Service has issued a marine warning with expectations of swells as high as 20 feet for some parts of the Gulf Coast. Gale-force winds are expected due to a storm that has a 70% chance of forming a cyclone.
A few hundred miles east of the Bahamas, meanwhile, another system is brewing, with a slight chance of strengthening over the week.
"Environmental conditions could be conducive for some development of this system during the next few days while it moves westward or west-northwestward," the National Hurricane Center said. "The system is forecast to approach the coast of the southeast United States on Thursday or Friday."
The U.S. National Oceanic and Atmospheric Administration (NOAA) is predicting above-normal hurricane activity in the Atlantic Basin this year, with a range of 17 to 25 named storms. Of those, as many as seven could be major hurricanes, with winds of 111 miles per hour or higher.
In comparison, the 2023 Atlantic hurricane season had 20 named storms, but only one hurricane made landfall in the United States.
The Texas Gulf Coast refining region has clusters of refinery capacity in Corpus Christi, Port Arthur and the Houston-Galveston region, boasting 5.5 million barrels per day (BBL/d) of refinery capacity. Refineries on the Louisiana Gulf Coast account for an additional 3.3 million BBL/d of capacity.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The North American energy sector could be facing its first major test since winter 2023-24. More than 70% of the United States saw sub-freezing temperatures in January, causing a surge in natural gas demand and calls for energy conservation.
Natural gas demand in January was on pace to break a record set in 2022, when Winter Storm Elliot prompted national alerts and caused at least 40 deaths.
Summer doesn't officially begin until June 20, but the Electric Reliability Council of Texas (ERCOT) (Austin, Texas) had already warned in early June of a 12% chance of rolling blackouts in August as electric demand, driven by high temperatures, high humidity, robust demand growth and other factors, could overtake supply. For more on that, see June 18, 2024, article - Was $10 Billion Enough? Texans Face Another White-Knuckled Summer.
It might not take that long. The National Weather Service on Monday said the first major heat wave of the year has already descended on much of the Midwest, Great Lakes, Mid-Atlantic and Northeast.
In Sugar Land, it's relatively cool by Texas standards, with highs topping out in the low 90s and major rains expected. It's the opposite in the Chicago metropolitan area, with the heat index topping out in the low triple digits.
More than 60 million people in the United States are under some form of heat advisory this week, the National Weather Service said.
The U.S. Department of Energy is already expecting a surge in demand through September given expectations of a warm summer. For just June, so-called cooling degree days, an indicator of air conditioner use, is 17% higher than June last year and 5% more than the entire summer of 2023.
Natural gas accounts for about 40% of the electricity on the grid. Henry Hub, the U.S. benchmark for the price of natural gas, was trading at $2.80 per million British thermal units (MMBtu) on Monday, some 32% higher than the May average. Natural gas inventories are expected to fall from 24% above the five-year average to 6% above the five-year average by October 31, which marks the end of the summer injection season.
Elsewhere, the National Weather Service has issued a marine warning with expectations of swells as high as 20 feet for some parts of the Gulf Coast. Gale-force winds are expected due to a storm that has a 70% chance of forming a cyclone.
A few hundred miles east of the Bahamas, meanwhile, another system is brewing, with a slight chance of strengthening over the week.
"Environmental conditions could be conducive for some development of this system during the next few days while it moves westward or west-northwestward," the National Hurricane Center said. "The system is forecast to approach the coast of the southeast United States on Thursday or Friday."
The U.S. National Oceanic and Atmospheric Administration (NOAA) is predicting above-normal hurricane activity in the Atlantic Basin this year, with a range of 17 to 25 named storms. Of those, as many as seven could be major hurricanes, with winds of 111 miles per hour or higher.
In comparison, the 2023 Atlantic hurricane season had 20 named storms, but only one hurricane made landfall in the United States.
The Texas Gulf Coast refining region has clusters of refinery capacity in Corpus Christi, Port Arthur and the Houston-Galveston region, boasting 5.5 million barrels per day (BBL/d) of refinery capacity. Refineries on the Louisiana Gulf Coast account for an additional 3.3 million BBL/d of capacity.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
