Natural gas getting more expensive contrary to analysts’ forecasts
2023.06.02 15:53
Natural gas getting more expensive contrary to analysts’ forecasts
By Kristina Sobol
Budrigannews.com – Petroleum gas prospects limped in with an everyday addition and a little week after week misfortune as market members look past the main infusion of over 100 billion cubic feet, or bcf, in the ebb and flow stockpiling season for the fuel fully expecting close term interest.
Friday’s session ended at $2.172 per mmBtu, or metric million British thermal units—an increase of 0.6 percent from the previous day’s close. After four days of losses, it was the benchmark gas futures contract’s first daily gain.
For the week, the agreement completed down 0.4%, adding to the 15.6% dive in the earlier week.
Gelber & Associates, a Houston-based energy markets advisory, stated, “The second half of June into early July suggests that consistent heat isn’t too far off into the future. Once that heat materializes, demand will rebound.” The market appears to be beginning to price this in, and additional support for bulls may emerge.
The bounce back came after the Energy Data Organization, or EIA, revealed in its gathering of gas for the week finished May 26 that U.S. inventories of the fuel rose by 110 bcf last week.
That was in contrast to the 96-bcf injection that occurred the week prior to May 19. It also stood in contrast to the 82 bcf injection that occurred the same week last year and the average build of 101 bcf over five years (2018-2022).
The EIA reported that the total gas in underground caverns in the United States stood at 2.446 trillion cubic feet (tcf), up 29.5% from the previous year’s level of 1.889 tcf and 16.6% higher than the average for the past five years, which was 2.097 tcf.
Henry Hub’s benchmark gas contract reached 11-week highs of approximately $2.70 just two weeks ago, breaking out of the confines of mid-$2 pricing on the idea that the market may finally be turning the corner on fundamentals despite its oversupply.
However, in recent days, it has returned to below $2.50, proving once more to be a formidable obstacle for gas bulls.
