Natural gas futures are trading above $5 for the first time since January 2014. Despite a larger-than-expected US supply withdrawal, the bulls took over the party and helped prices record another rally. The energy commodity has had a tremendous year and is looking to add to its gains heading into the autumn and winter seasons.
October natural gas futures soared $0.098, or 1.99%, to $5.012 per million British thermal units (btu) at 19:16 GMT on Thursday on the New York Mercantile Exchange. Natural gas is poised for a weekly gain of 8.25%, adding to its year-to-date spike of close to 100%.
According to the US Energy Information Administration (EIA), domestic inventories of natural gas climbed 52 billion cubic feet in the week ending September 3. This was higher than the median estimate of 40 billion cubic feet and up from last week’s build of 20 billion cubic feet.
In total, US natural gas storage levels stand at 2.923 trillion cubic feet, down 592 billion cubic feet from the same time a year ago. They are also 235 billion cubic feet below the five-year average of 3.158 trillion cubic feet.
In the aftermath of Hurricane Ida, approximately two billion cubic feet of production went offline, while also diminishing industrial demand for natural gas in the Gulf of Mexico. That said, according to Criterion Research’s James Bevan (as per NatGasIntel), demand has recovered at a quicker pace than output, as “pipeline deliveries to industrial facilities have now recovered back above 0.5 Bcf/d, and power plant deliveries are holding near 0.5 Bcf/d.”
Bespoke Weather Services is pleased that US natural gas stockpiles rising ahead of winter. The organization believes that supplies will fall short of what is projected to be needed if temperatures are colder than historical averages.
In other energy commodities, October West Texas Intermediate (WTI) crude oil futures plunged $1.35, or 1.95%, to $67.95 per barrel. November Brent crude futures shed $0.19, or 0.27%, to $71.26 a barrel. October gasoline futures slipped $0.0325, or 1.52%, to $2.0996 per gallon. October heating oil futures slumped $0.0282, or 1.32%, to $2.1082 per gallon.