US Natural Gas Prices Fall Despite Demand From Mexico
Natural gas fell steadily last week and closed Friday at 27.75 having begun the week at 29.61. The downwards movement was the result of mild weather forecasts across most of the US and a bearish supplies report on Thursday.
With the weather forecast for the next few weeks predicting cool temperatures there will not be much gas used for cooling. Furthermore, as the Energy Information Administration reported that US natural gas stockpiles are growing, the price is likely to be driven down further.
The US surplus is helping to drive Mexican-based manufacturing with exports having risen 11% in 2014, reaching two billion cubic feet per day. Analysts at Bentek Energy expect that amount could grow as much as 100% within the next few years as Mexican industries expand at a significant rate.
Mexico does have substantial shale resources within its borders, but lacks the want and capability to extract them, instead relying on the US natural gas abundance to meet demand.