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Natural Gas Falls on Rising Domestic Inventories

August 16, 2018 at 16:48 by Andrew Moran

Natural gas futures are trading lower on Thursday after the US government reported that domestic inventories of the energy supply climbed more than what the market had anticipated. The weekly report could leave natural gas poised for a weekly decline.

October natural gas futures shed $0.025, 0.85%, to $2.923 per million British thermal units at 16:26 GMT on Thursday on the New York Mercantile Exchange. Natural gas prices have surged over the last month, tacking on 6%, bringing year-to-date gains to roughly 4%.

With Thursday’s performance, natural gas is on track for a weekly drop.

According to the US Energy Information Administration (EIA), domestic stockpiles of natural gas increased by 33 billion cubic feet for the week ending August 10, which is higher than the market projections of 30 billion cubic feet. In total, inventories stand at 2.387 trillion cubic feet, which is down 687 billion cubic feet from the same time a year ago. They are also 595 billion below the five-year average.

Amid the financial crisis in the fallout of the US government’s doubling of tariffs on steel and aluminum exports, Turkey has announced that it is moving ahead with its natural gas infrastructure expansion plans. The Turkish government has agreed to grant Botas, a major state gas importer and transit grid operator, a license to acquire land for a large natural gas pipeline.

In other energy markets, September West Texas Intermediate (WTI) crude oil futures advanced $0.34, or 0.5%, to $68.09 per barrel. September Brent crude futures dipped $0.29, or 0.4%, to $72.61 a barrel. September gasoline futures were flat at $1.9784 per gallon. September heating oil futures were also flat at $2.0979 gallon.

On Wednesday, the EIA reported that US crude supplies surged 6.8 million barrels, while domestic output jumped 100,000 barrels per day (bpd) to 10.9 million bpd. Gasoline stockpiles declined 740,000 barrels, while distillate inventories rose 3.6 million barrels.

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