Wednesday , January 29 2020
Home / Commodity Blog / Natural Gas Rebounds on Fourth Straight Weekly Supply Drop

Natural Gas Rebounds on Fourth Straight Weekly Supply Drop

Summary:
Natural gas futures are rallying on Thursday after the US government reported the fourth consecutive weekly decline in domestic inventories. But natural gas prices have plunged over the last week on investor concerns that cold temperatures will not be enough to lift demand to counter the output surge. January natural gas futures rose %excerpt%.035, or 1.41%, to .275 per million British thermal units (btu) at 15:07 GMT on Thursday on the New York Mercantile Exchange. Natural gas is on track for a weekly slide of about 5%, adding to its year-to-date loss of 20%. According to the US Energy Information Administration (EIA), domestic stockpiles declined by 73 billion cubic feet for the week ending December 6, which is close to what the market had penciled in. In total, supplies stand at 3.518

Topics:
Andrew Moran considers the following as important:

This could be interesting, too:

S&P Global Platts writes Commodity Tracker: 6 charts to watch this week

Andrew Moran writes Natural Gas Rises on Bigger Supply Build Decline, Colder Temperatures

Andrew Moran writes Natural Gas Rises As Supply Build Beats Market Forecasts

Vladimir Vyun writes Crude Oil Falls Despite Decline of US Oil Rig Count

Natural gas futures are rallying on Thursday after the US government reported the fourth consecutive weekly decline in domestic inventories. But natural gas prices have plunged over the last week on investor concerns that cold temperatures will not be enough to lift demand to counter the output surge.

January natural gas futures rose $0.035, or 1.41%, to $2.275 per million British thermal units (btu) at 15:07 GMT on Thursday on the New York Mercantile Exchange. Natural gas is on track for a weekly slide of about 5%, adding to its year-to-date loss of 20%.

According to the US Energy Information Administration (EIA), domestic stockpiles declined by 73 billion cubic feet for the week ending December 6, which is close to what the market had penciled in. In total, supplies stand at 3.518 trillion cubic feet, up 593 billion cubic feet from the same time a year ago. They are also 14 billion cubic feet below the five-year average.

The natural gas industry was rocked this week when Chevron, America’s second-largest oil and gas giant, announced that it would write down as much as $11 billion in assets, most of which were holdings in natural gas. Over the last decade, Chevron has been one of the biggest bulls in natural gas, scooping up smaller firms to take advantage of the fuel. Because there is a global supply glut in natural gas, companies are not making as much money as they thought they would. While demand is growing worldwide, they are not surpassing supply levels.

Chevron’s decision mirrors that of Exxon Mobil’s recent write-down of its US natural gas assets by $2.5 billion, despite investing more than $30 billion in production capabilities and facilities since 2010.

Meanwhile, it may be cold outside, but it might not be enough to push natural gas prices higher. Subzero temperatures are blanketing about 60% of the country, but analysts fear the winter weather will fail to drive demand to counter climbing output levels.

In other energy markets, January West Texas Intermediate (WTI) crude oil futures soared $0.56, or 0.95%, to $59.32 per barrel. February Brent crude futures advanced $0.63, or 0.99%, to $64.35 a barrel. January gasoline futures jumped $0.01, or 0.6%, to $1.63 a gallon. January heating oil futures surged $0.0185, or 0.96%, to $1.9475 per gallon.

If you have any questions and comments on commodities today, use the form below to reply.


© AndrewMoran for Commodity Blog, 2019. | Permalink | No comment | Add to

Better Feed from Ozh

Andrew Moran
I am a full-time professional writer. Prior to my self-employment, I worked as a reporter for Digital Journal covering the politics beat and The Toronto Times reporting on the city’s entertainment scene. I currently write mostly about business, marketing and finance

Leave a Reply

Your email address will not be published. Required fields are marked *