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Natural Gas Posts More Gains as US Supplies Fall

April 26, 2018 at 16:39 by Andrew Moran

Natural gas futures are extending their gains on Thursday after a new US government report found domestic stockpiles fell more than initially expected. If natural gas prices continue this performance, they may be poised for a 5% weekly gain.

June natural gas futures rose $0.022, or 0.78%, to $2.829 per British thermal units (btu) on Thursday on the New York Mercantile Exchange. Natural gas has recorded modest increases in April, advancing nearly 2%. Year-to-date, prices are up close to 2.5%.

According to the US Energy Information Administration (EIA), US supplies of natural gas tumbled by 18 billion cubic feet for the week ending April 20. The market had originally anticipated a drop of 12 billion cubic feet. Natural gas stocks total 1.281 trillion cubic feet, down 897 billion cubic feet from the same time a year ago and 527 billion below the five-year average.

On Tuesday, the World Bank released its April Commodity Markets Outlook and projected that prices for commodities like natural gas, oil, and coal could surge a staggering 20% this year. This is up from 16% from October’s forecast.

China may provide a significant contribution to the international natural gas market by 2020. Last week, it was reported that China will double its natural gas production levels from shale basins over the next two years. Though it is likely to be far less than the US shale revolution, its capabilities are improving and could put a dent in the global sector.

In other energy markets, June gasoline futures were flat at $2.097 per gallon and June heating oil futures jumped $0.0178, or 0.83%, to $2.153 a gallon.

June West Texas Intermediate (WTI) futures dipped $0.07, or 0.10%, to $67.98 per barrel. June Brent crude futures advanced $0.35, or 0.47%, to $74.35 a barrel.

The EIA reported on Wednesday that US crude inventories increased 2.2 million barrels, while domestic oil output reached 10.59 million bpd. Gasoline stockpiles swelled by 840,000 barrels, while distillate stockpiles slid 2.6 million barrels.

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