Natural gas futures eyed $2 on Thursday despite a higher-than-expected US supply build. The energy commodity has had a strong week and is poised for a double-digit gain, helping it trim its year-to-date losses. But natural gas prices might be unable to sustain the near-term momentum heading into May.
June natural gas futures picked up $0.005, or 0.2%, to $1.985 per million British thermal units (Btu) at 17:15 GMT on Thursday on the New York Mercantile Exchange. Natural gas prices are on track for a weekly increase of more than 13%. Year-to-date, they are still down more than 14%.
According to the US Energy Information Administration (EIA), domestic inventories of natural gas surged 92 billion cubic feet for the week ending April 19, up from 50 billion cubic feet in the previous week. This came in slightly higher than the consensus estimate of 87 billion cubic feet and represented the fourth consecutive weekly storage boost.
US supply injections were nationwide, led by the East (29 billion cubic feet), South Central (28 billion cubic feet), and the Midwest (23 billion cubic feet.
In total, US inventories of natural gas stand at 2.425 trillion cubic feet, up 439 billion cubic feet from the same time a year ago. They are also 655 billion cubic feet above the five-year average of 1.77 trillion cubic feet.
Despite some hiccups, the US natural gas sector is booming, and market watchers say that the current administration needs to signal to the world that the United States will be the top liquefied natural gas (LNG) exporter.
“The Biden administration needs to start signaling to the world that we are going to continue to be the world’s largest liquefied natural gas exporter. We need to stop playing politics with US energy and get back to reality that natural gas is going to be the best way to reduce greenhouse gas emissions in emerging markets along with increase use of nuclear power,” said Phil Flynn, an energy strategist at The PRICE Futures Group.
In other energy commodities, May West Texas Intermediate (WTI) crude oil futures fell $0.24, or 0.29%, to $82.57 per barrel. June Brent crude futures shed $0.27, or 0.31%, to $86.77 a barrel. May gasoline futures dipped $0.0056, or 0.21%, to $2.7031 per gallon. May heating oil futures dropped $0.021, or 0.82%, to $2.5386 a gallon.