The market had prophesied a much larger supply recession amid cooling temperatures and snow hitting many US parts. Nevertheless, the unexpected weekly report implied energy demand might not be as intense in the middle of one of the coldest Februarys on record.
March natural gas futures fell $0.022. This corresponds to 0.76%, to $2.883 per million British thermal units (BTU) at 14:41 GMT on Thursday. Natural gas prices are on course for a weekly decline of 0.5%, although they are still up nearly 16% year-to-date.
As stated by the US Energy Information Administration, domestic inventories decreased 171 billion cubic feet for February 5. This is lower than the median valuation of 181 billion cubic feet.
Market analysts consider that the report will mark the next two withdrawals. Notwithstanding the US undergoing a deep freeze last week, inventory levels were inadequate to contract at a level more significant than the prior week’s report.
In early trading, it was apparent that the market is confident that Arctic-like temperatures will cover much of the US over the next several days. If estimates are correct, and the severe cold weather hits the Rockies, the South, and the Midwest, energy demand would pin, and freeze-offs would become more asserted.
But investors will be looking forward to the end of February when the cold temperatures begin to disappear and the weather turns to a more comfortable range.
However, February 2021 is poised to have a record month for cooling temperatures, landing on the top five.
Can cool air be enough to raise natural gas prices at $3?
This month, it has been a volatile market, so it could be more rough trading until winter is over.
In other energy commodities, March West Texas Intermediate (WTI) crude oil futures dropped $0.14, or 0.24%, to $58.54 per barrel. April Brent crude futures slipped $0.12, or 0.2%, to $61.35 a barrel. March gasoline futures are bound up by $0.0054, or 0.33%, to $1.6588 per gallon. March heating oil futures plunged $0.0018, or 0.1%, to $1.7591 a gallon.
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