The energy commodity has remained one of the top-performing assets this year, thanks to a mix of rising demand and simple drop-in production levels.
But with a reduction of cooling temperatures in the US, could natural gas start 2021 in the red?
February natural gas futures surged $0.056, or 2.31%, to $2.478 per million British thermal units (BTU) at 14:40 GMT on Thursday. Natural gas will experience a weekly loss of 3.1%, but the so-called bridge fuel will record a 13% roll in 2020.
As stated by the US Energy Information Administration (EIA), domestic stockpiles of natural gas dropped 114 billion cubic feet in the week finishing December 25. The S&P Global Platts’ median assessment implied that inventory retreats range from 107 billion cubic feet to 135 billion cubic feet. This also served the sixth continuous weekly drop in US storage inventories.
In sum, US supplies hold at 3.460 trillion cubic feet, up 251 billion cubic feet from the equal time a year ago. They are also 206 billion cubic feet over the five-year median of 3.254 trillion cubic feet.
Since changing at the start of December, natural gas prices have increased in the last couple of weeks, but they will register a monthly decline of around 1.5%. Colder temperatures had allowed compressed balances in the closing weeks of 2020, with temperatures nationwide moving a little more than three degrees on December 29, driven by a decrease of 8.6 degrees in the Northeast.
Overall, national demand expanded to 122.3 billion cubic feet on Monday, while supplies reduced to 96.2 billion cubic feet.
However, warmer weather scattered across the US and expectations of an above-average February and March has measured on the natural gas market since beating a two-year high of $3.50.
COMMENTS