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Natural Gas Plunges as US Supplies Surge

May 2, 2019 at 15:29 by Andrew Moran

Natural gas futures are plummeting on Thursday as the US government reported a higher-than-expected increase in domestic stockpiles. Despite a disappointing first half for the energy source, the US natural gas industry celebrated data that found exports to Europe have spiked considerably since 2016.

June natural gas futures tumbled $0.055, or 2.04%, to $2.56 per million British thermal units (btu) at 14:59 GMT on Thursday on the New York Mercantile Exchange. Natural gas is on track for a modest weekly gain, but the energy commodity is still down roughly 6% so far on the year. Natural gas prices are trading relatively the same compared to this point in the previous year.

According to the US Energy Information Administration (EIA), domestic inventories climbed by 123 billion cubic feet for the week ending April 26. This is higher than the market forecast of 118 billion. In total, stockpiles stand at 1.462 trillion cubic feet, which is up 128 billion cubic feet from the same time a year ago. Also, they are 316 billion below the five-year average.

On Thursday, the European Union announced that US imports of liquefied natural gas (LNG) have soared 272% since 2016. European Commission President Jean-Claude Juncker revealed that a huge portion of the imports came after his meeting with President Donald Trump. The EU’s highest imports took place in March with approximately 1.4 billion cubic meters of LNG purchases.

The announcement comes as European and US business leaders and officials meet in Brussels to discuss boosting the natural gas trade. The meeting will feature Energy Secretary Rick Perry and EU Commissioner for Climate Action and Energy Miguel Arias Cañete.

Secretary Perry said in a statement:

We share a history of transatlantic cooperation, through good times and bad, and together, we promote our heritage of freedom. When it comes to natural gas, we each have what the other needs to derive tremendous mutual benefit from advancing our energy relationship.

In other energy markets, June West Texas Intermediate (WTI) crude oil futures fell $2.15, or 3.38%, to $61.45 per barrel. July Brent crude futures shed $1.81, or 2.51%, to $70.37 a barrel. June gasoline futures plunged $0.05, or 2.5%, to $2.01 a gallon. June heating oil futures slipped $0.0275, or 1.33%, to $2.06 per gallon.

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