U.S. markets open in 8 hours 52 minutes
  • S&P Futures

    -1.50 (-0.04%)
  • Dow Futures

    -5.00 (-0.02%)
  • Nasdaq Futures

    -12.00 (-0.09%)
  • Russell 2000 Futures

    -1.70 (-0.09%)
  • Crude Oil

    -0.36 (-0.40%)
  • Gold

    -5.40 (-0.30%)
  • Silver

    -0.06 (-0.28%)

    -0.0002 (-0.02%)
  • 10-Yr Bond

    -2.7650 (-100.00%)
  • Vix

    -21.29 (-100.00%)

    +0.0005 (+0.04%)

    -0.1560 (-0.12%)

    -882.93 (-3.71%)
  • CMC Crypto 200

    -25.31 (-4.54%)
  • FTSE 100

    +5.78 (+0.08%)
  • Nikkei 225

    -205.93 (-0.74%)

Demand Shift Drives NatGas Higher Despite Storage Build

·2 min read

U.S. natural gas futures spiked to a nine-week high on Thursday on forecasts calling for higher demand over the next two weeks than previously expected. The price surge came despite a slightly bigger-than-expected storage build last week when mild weather kept heating demand low.

On Thursday, May natural gas futures settled at $5.642, up $0.037 or +0.66%. The United States Natural Gas Fund ETF (UNG) finished at $19.73, up $0.35 or +1.78%.

Short-Term Weather Outlook – ‘Modest Jump in National Demand April 8-10

NatGasWeather expects a “warm U.S. pattern” next week, with mild temperatures across the northern stretches of the country, the outlook is not entirely bearish, however. Heat in the southern expanses of the country, including some highs in the 80s and low 90s, could drive regional cooling demand.

Additionally, “there’s expected to be a modest bump in national demand April 8-10 as a weather system tracks across the Great Lakes and Ohio Valley and where much of the weather data trended a little colder” ahead of Thursday’s trading the forecaster said.

“However,” the firm added, forecasts point to “a return to light national demand April 11-15 as most of the U.S. warms to near or above normal, as nearly all subfreezing air retreats to Canada.”

US Energy Information Administration Weekly Storage Report

The EIA reported on Thursday that domestic natural gas supplies climbed by 26 billion cubic feet for the week ended March 25. That matched the average weekly climb forecast by analysts surveyed by S&P Global Commodity Insights.

Ahead of the report, Natural Gas Intelligence (NGI) reported, estimates submitted to Bloomberg as of Wednesday showed a median 25 Bcf injection for the week ended March 25. Projections ranged from 19 Bcf to 27 Bcf.

NGI also reported estimates in a Reuters poll ranged from a withdrawal of 8 Bcf to an injection of 34 Bcf, with a median increase of 22 Bcf. The Wall Street Journal’s survey found injection estimates spanning 8 Bcf to 29 Bcf and an average of 21 Bcf.

For the year-earlier period, EIA recorded a 7 Bcf build, while the five-year average is a withdrawal of 23 Bcf.

Total supplies in storage stand at 1.415 trillion cubic feet, down 347 Bcf from a year ago and 244 Bcf below the five-year average the government said.

Monthly, Quarterly Recap

May natural gas futures gained 27.65% in March, its biggest monthly gain since it rose about 31% in January. For the quarter, futures were up about 51%, their biggest quarterly gain since rising about 61% in the third quarter of 2021.

For a look at all of today’s economic events, check out our economic calendar.


This article was originally posted on FX Empire