Advertisement
Advertisement

NatGas Strength Supported by Bullish EIA Storage Data

By:
James Hyerczyk
Published: Apr 7, 2022, 18:10 UTC

U.S. gas futures have soared about 65% so far this year with much higher prices in Europe keeping demand for U.S. LNG near record highs.

Natural Gas

In this article:

U.S. natural gas futures are trading higher late in the session on Thursday on a preliminary decline in output and forecasts for more power generation and liquefied natural gas (LNG) export demand for gas over the next two weeks than previously expected.

The market is also being supported by a government report that showed a larger-than-expected withdrawal from storage inventories for the week ending April 1.

At 17:44 GMT, May natural gas futures are trading $6.277, up $0.248 or +4.11%. The United States Natural Gas Fund ETF (UNG) is at $21.91, up $0.68 or +3.20%.

The Year So Far…

U.S. gas futures have soared about 65% so far this year with much higher prices in Europe keeping demand for U.S. LNG near record highs as several countries wean themselves off Russian gas after Moscow invaded Ukraine on February 24, an action Moscow calls a “special military operation.”

Refinitiv Output and Demand Projections

Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 94.5 billion cubic feet per day (bcfd) so far in April from 93.7 bcfd in March. That compares with a monthly record of 96.3 bcfd in December.

On a daily basis, output on Thursday was on track to drop 0.8 bcfd to 93.3 bcfd due mostly to declines along the Gulf Coast and Appalachia, according to preliminary Refinitiv data. That preliminary data, however, has shown similar declines in recent days that were later revised much lower.

Short-Term Weather Outlook

According to NatGasWeather for April 7-13, “A spring storm will extend from the Great Lakes to the Southeast today with showers, thunderstorms, and pocket of snowfall near the Canadian border, then tracking into the East Friday through Sunday for a minor bump in national demand.

Overall, temperatures will be mild to cool across the northern U.S. with highs of upper 30s to 60s, lows of 20s to 30s, while warm across the southern U.S. with 70s and 80s besides hotter 90s Southwest into California.

A return of light demand is expected next week as the East warms into the 60s to 80s, while unsettled over the West.

Daily May Natural Gas

Daily Forecast

May natural gas futures are likely to remain strong into the close on Thursday on the back of a bigger-than-expected weekly decline in U.S. natural gas supplies.

The U.S. Energy Information Administration reported on Thursday that domestic natural gas supplies fell by 33 billion cubic feet (Bcf) for the week ended April 1. That compared with an average weekly decline of 27 billion forecast by analysts surveyed by S&P Global Commodity Insights.

Total supplies in storage stand at 1.382 trillion cubic feet (Tcf), down 399 Bcf from a year ago and 285 Bcf below the five-year average, the government said.

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

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Did you find this article useful?

Advertisement