Natural gas futures tumbled on Thursday after the US government reported a slightly higher-than-expected weekly build in storage inventories. Natural gas has been engaged in choppy trading this week, although it is poised for an impeccable gain. The so-called bridge fuel remains the top-performing commodity this year.
May natural gas futures plunged $0.323, or 4.34%, to $7.118 per million British thermal units (Btu) at 15:24 GMT on Friday on the New York Mercantile Exchange. Natural gas prices will post a weekly rally of around 4%, lifting their year-to-date surge to nearly 100%. Over the last 12 months, natural gas has spiked about 141%.
According to the US Energy Information Administration (EIA), domestic supplies of natural gas increased 40 billion cubic feet in the week ending April 22, slightly higher than the market forecast of a 38-billion-cubic-foot build. This is lower than the median estimate of 53 billion cubic feet.
In total, US supplies stand at 1.490 trillion cubic feet, down 406 billion cubic feet from the same time a year ago. They are also 305 billion cubic feet below the five-year average.
The gap between current stockpile levels and the five-year average edged up slightly to 17%.
It was cooler than normal in many parts of the US as the year continues to give North America lower temperatures.
That said, market analysts do not think these types of storage numbers will be repeated moving forward, with some describing it as a “one-off.”
In other industry news, there has been a lot of focus on Russia cutting off natural gas flows to Poland and Bulgaria as the two European countries refused to pay in rubles.
“He wants to fragment European countries and their stance toward energy diversification and the overall stance against Russia,” said Simone Tagliapietra, an energy expert and senior fellow at the Bruegel think tank in Brussels, in an interview with the Associated Press.
“What he is creating is a system where he can basically divide countries, as we are seeing, for the ones that don’t want to comply with this new scheme will be cut off, while others will try to comply and essentially go against the European Union indication.”
In other energy commodities, May West Texas Intermediate (WTI) crude oil futures soared $1.66, or 1.63%, to $103.68 per barrel. June Brent crude futures surged $1.23, or 1.17%, to $106.18 a barrel. May gasoline futures rose $0.0499, or 1.46%, to $3.4629 per gallon. May heating oil futures added $0.0412, or 0.95%, to $3.9764 a gallon.