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Natural Gas Rallies 14% on Smaller-Than-Expected Supply Build, Cold Weather

Summary:
Natural gas futures are soaring on Thursday after the US government reported a smaller-than-expected supply build. With North America and Europe bracing for cold temperatures over the next few weeks, natural gas prices are poised to have a big November. Could natural gas test by year’s end? November natural gas futures climbed %excerpt%.419, or 13.99%, to .415 per million British thermal units (btu) at 15:55 GMT on Thursday on the New York Mercantile Exchange. Natural gas prices had been trading at their best levels since the end of 2018 before Thursday’s impressive rally. Year-to-date, natural gas is up 56%. According to the US Energy Information Administration (EIA), domestic inventories of natural gas increased by 29 billion cubic feet for the week ending October 23. The median estimate

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Natural gas futures are soaring on Thursday after the US government reported a smaller-than-expected supply build. With North America and Europe bracing for cold temperatures over the next few weeks, natural gas prices are poised to have a big November. Could natural gas test $4 by year’s end?

November natural gas futures climbed $0.419, or 13.99%, to $3.415 per million British thermal units (btu) at 15:55 GMT on Thursday on the New York Mercantile Exchange. Natural gas prices had been trading at their best levels since the end of 2018 before Thursday’s impressive rally. Year-to-date, natural gas is up 56%.

According to the US Energy Information Administration (EIA), domestic inventories of natural gas increased by 29 billion cubic feet for the week ending October 23. The median estimate had been 37 billion cubic feet. In total, supplies stand at 3.955 trillion cubic feet, up 285 billion cubic feet from the same time a year ago. They are also 289 billion cubic feet above the five-year average.

Up until the US government report, it had been relatively quiet in the natural gas market this week. Prices had hovered around the psychologically important figure of $3 for the last several trading sessions.

Hurricane Zeta had less of an impact on the storm-weary Gulf Coast than some had initially anticipated. It was downgraded to a Category 1 by the time it reached Louisiana, but the hurricane still left a trail of wreckage and blackouts. The energy industry is surveying the damage in the aftermath of the weather event.

Although there are signs of colder weather, the natural gas market is still waiting for more clarity. EBW Analytics Group believes that a colder mid-November could trigger a substantial rally, particularly if this is coupled by greater liquefied natural gas (LNG) exports next month. October had generated an increase in LNG shipments as more countries make the switch to the so-called bridge fueld.

In other energy commodities, December West Texas Intermediate (WTI) crude oil futures tumbled $1.42, or 3.8%, to $35.97 per barrel. January Brent crude futures fell $1.44, or 3.63%, to $38.20 a barrel. November gasoline futures shed $0.0344, or 3.23%, to $1.0292 a gallon. November heating oil futures slipped $0.0269, or 2.42%, to $1.0864 per gallon.

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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

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