Natural gas futures are trading sharply lower late in the session on Thursday, erasing nearly all of this week’s gains while putting the market in a position to challenge last week’s low at $1.822 and the March 18 main bottom at $1.802.
Earlier today, the U.S. Energy Information Administration (EIA) reported that domestic supplies of natural gas rose by 81 billion cubic feet for the week-ended May 15. That figure matched the average increase forecasted by analysts polled by S&P Global Platts.
Total stocks now stand at 2.503 trillion cubic feet, up 779 billion cubic feet from a year ago, and 407 billion cubic feet above the five-year average, the government said.
According to Natural Gas Intelligence (NGI), Bespoke Weather Services, which had projected an 85 Bcf injection, said it wasn’t reading much into the latest EIA figures despite the miss, as it was a “very heavy” heating degree day week and marked the end of any possible influence of heating demand.
“It does represent a little balance improvement, but far more important will be the trend in the next few EIA numbers, as this week’s data has shown some demand coming,” Bespoke said. “Low global prices keep concern alive for further liquefied natural gas slowdowns, however.”
Short-Term Weather Outlook
According to NatGasWeather for May 21 to May 27, “A slow moving weather system remains across the east-central US with heavy showers and thunderstorms, although rather comfortable highs of upper 60s and 70s. A second weather system is bringing rain and snow showers to the Northwest with slightly cool highs of 50s and 60s. Over the central US and Texas, high pressure is resulting in very warm to hot highs of 80s to 90s. This weekend into next week will bring near ideal temperatures of 60s to 80s across the northern US, while very warm over the southern US with 80s to 90s, hottest Southwest deserts. Overall, light demand besides where locally hotter over the Southwest into Texas.”
This article was originally posted on FX Empire
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