Natural gas prices caught a breather on Wednesday after a meteoric rise earlier in the week. Now that the weekly inventory data is out of the way, investors could be focusing on the weather again. Especially with Arctic temperatures assumed to blanket North America and Europe for the following 14 days. Could this be the impetus for prices to exceed $3?
March natural gas futures surged $0.039, or 1.4%, to $2.828 per million British thermal units (BTU) at 14:42 GMT on Thursday. Natural gas is poised for a weekly of around 4%, bringing its year-to-date rise to 10%.
As stated by the US Energy Information Administration (EIA), domestic supplies of natural gas decreased 192 billion cubic feet for the week closing January 29.
A Reuters survey of 18 analysts had expected withdrawals of within 172 billion cubic feet and 202 billion cubic feet. Bloomberg and Wall Street Journal polls highlighted equivalent numbers. Natural Gas Intelligence foretold a 197 billion cubic feet withdrawal.
In total, EIA data point that US stockpiles reach 2.689 trillion cubic feet, up 41 billion cubic feet from the identical time a year ago.
Natural gas prices had risen earlier this week
They are also 198 billion cubic feet over the five-year average.
It should be remarked that this report was for storage levels before the snowstorm that crashed into the northeast and the Arctic air covered many parts of the US. Next week’s supply data could be more influential on the natural gas market.
Natural gas prices had risen earlier this week, but they had fallen on Wednesday, with investors possibly taking early profits. Notwithstanding the recent movement, market analysts are still expecting significant gains for the so-called bridge fuel as the long-range weather forecast highlight freezing temperatures for the rest of the month in the US, Canada, and Europe.
It seems the reasoning in the market is simply that we can price anywhere since we will not fall out of gas, but possibly this action is simply a difference that will fix itself. If it does, we should at least scale back toward the $2.90 level. Spirit is lower, yet, given the inconsistency currently.
Could this be a matter of natural gas investors holding a short-term outlook? In extension to the end of winter, traders are also registering to think the domestic output will pin should the market continue to contract.
Market watchers consider that if natural gas prices approach $3, it will cause a dramatic push of $3.32.
In other energy commodities, March West Texas Intermediate (WTI) crude oil futures dropped $0.28, or 0.5%, to $55.41 per barrel. April Brent crude futures scattered $0.30, or 0.51%, to $58.16 a barrel. March gasoline futures slid $0.0221, or 1.34%, to $1.6265 a gallon. March heating oil futures declined $0.0156, or 0.92%, to $1.6749 per gallon.