Natural gas futures sank toward the end of the trading week, despite the broader global energy market surging. Natural gas has been one of the stable commodity throughout the six-week-old war in Iran, but primarily in the United States.
May natural gas futures tumbled $0.031, or 1.14%, to $2.693 per million British thermal units (Btu) at 15:41 GMT on Thursday on the New York Mercantile Exchange. Natural gas has declined by about 4% this week and is down almost 15% this year.
Thursday’s drop was driven mainly by a sizable injection in US storage.
For the week ending April 3, domestic natural gas inventories increased by 50 billion cubic feet, from 36 billion in the previous week, according to the US Energy Information Administration.
The consensus estimate suggested a build of 46 billion cubic feet.
Last week’s increase was fueled by the South Central (32 billion cubic feet), followed by the Midwest (eight billion cubic feet) and the East (seven billion cubic feet).
In total, US natural gas supplies stand at 1.911 trillion cubic feet, up 89 billion cubic feet from the same time a year ago. They are also 87 billion cubic feet above the five-year average.
Looking ahead, at least in the United States, natural gas prices could be driven by the weather.
“Fox Weather outlook is turning favorable for bears: the spring warmup is finally arriving across the Midwest and Northeast, with above-normal temperatures dominating the 6-10 day forecast and severe-storm activity that usually keeps heating demand in check. That should support a solid build number today and keep a lid on prices unless we get a surprise cold snap,” said Phil Flynn, an energy strategist at The PRICE Futures Group, in an April 9 note.
In other energy markets, May West Texas Intermediate (WTI) crude oil futures surged $5.39, or 5.71%, to $99.80 per barrel. June Brent crude futures climbed $2.61, or 2.75%, to $97.29 a barrel. May gasoline futures rose $0.0441, or 1.47%, to $3.05 a gallon. May heating oil futures advanced $0.01582, or 4.14%, to $3.9659 per gallon.