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Natural Gas Jumps 2% As Inventories Match Market Projections

June 7, 2018 at 16:39 by Andrew Moran

Natural gas futures advanced as much as 2% on Thursday after the US government’s weekly report matched market expectations. Natural gas prices are attempting to carry their momentum from May into June as they are up nearly 5% in that time.

July natural gas futures rose $0.052, or 1.80%, to $2.948 per British thermal units at 16:08 GMT on Thursday on the New York Mercantile Exchange. Natural gas topped $2.98 earlier in the trading session before paring those gains.

According to the US Energy Information Administration (EIA), domestic natural gas inventories surged 92 billion cubic feet for the week ending June 1, which is the same as what analysts had estimated. In total, stockpiles stand at 1.817 trillion cubic feet, down 799 billion cubic feet from the same time a year ago. It is also 512 billion cubic feet below the five-year average.

Natural gas investors do not appear to be immediately concerned by President Donald Trump’s tariffs, which many experts warned would affect the energy industry and risk impacting the president’s energy independence agenda. In recent months, the White House has proposed slashing royalty rates for oil and gas wells on public lands, limiting environmental reviews, boosting exports, and expanding access to protected areas. Analysts say that all of these initiatives would give the natural gas sector a significant boost and potentially protect it from the global trade war.

In other energy markets, July gasoline futures jumped $0.038, or 1.87%, to $2.108 per gallon. July heating oil futures edged up $0.038, or 1.82%, to $2.165 a gallon.

Crude, meanwhile, tumbled to a two-month low on Wednesday after the EIA reported a weekly increase in stocks.

According to the EIA, domestic oil stockpiles soared 2.1 million barrels, while US output advanced 38,000 barrels per day (bpd) to reach another record at 10.8 million bpd. Gasoline inventories rose 4.6 million barrels, while distillate stockpiles declined 600,000 barrels.

Oil is rallying towards the end of the trading week. July West Texas Intermediate (WTI) crude futures rallied $1.05, or 1.62%, to $65.78 a barrel. August Brent crude futures soared $1.49, or 1.98%, to $76.85 per barrel.

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