Natural gas futures are recording modest gains on Thursday, although the energy commodity is still poised for a weekly loss. Natural gas prices are rising after the US government reported a larger-than-expected withdrawal. But will the so-called bridge fuel sustain its upward momentum?
May natural gas futures advanced $0.07, or 1.53%, to $4.631 per million British thermal units (btu) at 15:52 GMT on Thursday on the New York Mercantile Exchange. Natural gas is on track for a weekly decline of more than 2%, paring its year-to-date gain to below 30%.
According to the US Energy Information Administration (EIA), domestic inventories of natural gas declined 124 billion cubic feet in the week ending March 4, bigger than the market forecast of 117 billion cubic feet.
In total, US natural gas supplies stand at 1.519 trillion cubic feet, down 281 billion cubic feet from the same time last year. They are also 290 billion cubic feet below the five-year average of 1.809 trillion cubic feet.
Industry observers note that weather conditions were colder than normal for this time of the year, particularly in the northern and central United States.
Moreover, there has been strong demand for US liquefied natural gas, driven mainly by Russia’s invasion of Ukraine that has left Europe relying more on US energy exports to keep the lights.
The US government has urged America’s crude oil and natural gas industry to expand output in response to escalating prices.
“We are on war footing – an emergency – and we have to responsibly increase short-term supply where we can right now to stabilize the market and to minimize harm to American families,” Energy Secretary Jennifer Granholm told the audience at CERAWeek by S&P Global in Houston on Wednesday.
“We could not be having this conversation at a more intense, troubling, shocking time in world history…with enormous consequences for the future of energy,” Granholm told the audience. “Maybe it’s because a global crisis, like what’s happening in Ukraine, sharpens the mind, but I’m in a mood to cut to the chase here and tell you what I really think about where we are as a country and as a part of the energy sector.
In other energy commodities, April West Texas Intermediate (WTI) crude futures added $0.68, or 0.63%, to $109.53 per barrel at 15:59 GMT on Thursday on the New York Mercantile Exchange. May Brent futures picked up $1.63, or 1.47%, to $112.77 a barrel. April gasoline futures shed $0.0509, or 1.55%, to $3.2429 a gallon. April heating oil futures tumbled $0.0708, or 2.04%, to $3.3935 per gallon.