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Natural Gas Retreats From Massive Rally on Jump in US Supplies

October 31, 2019 at 15:11 by Andrew Moran

Natural gas futures are sliding on Thursday after the US government reported a bigger-than-expected increase in domestic inventories of the energy source. This comes shortly after the federal government confirmed that the US has doubled its natural gas exports, suggesting that US production continues to ramp up and meet global demand. 

December natural gas futures tumbled $0.025, or 0.93%, to $2.66 per million British thermal units (btu) at 14:59 GMT on Thursday on the New York Mercantile Exchange. Natural gas prices are on track for a huge 16% weekly gain, making it one of the best performances this year. 

According to the US Energy Information Administration (EIA), domestic stockpiles of natural gas climbed by 89 billion cubic feet for the week ending October 25. This is higher than the market forecast of 85 billion cubic feet. In total, inventories stand at 3.695 trillion cubic feet, up 559 billion cubic feet form the same time a year ago. They are also 52 billion cubic feet above the five-year average. 

It turns out that the Saudi America market remains healthy, stated the EIA in a separate report. 

In the first half of 2019, US net natural gas exports doubled from the same time a year ago. The trend was attributed to greater liquid natural gas (LNG) export capacity coming online in recent months. Between January and June of 2019, net natural gas exports topped an average of 4.1 billion cubic feet per day. Analysts say that more facilities are expected to open in the states of Texas and Georgia, suggesting that the nation’s natural gas export capacity could reach just under nine billion cubic feet a day by the end of next year. 

In 2017, the US became a net natural gas exporter for the first time in about 60 years.  

In other energy markets, December West Texas Intermediate (WTI) crude oil futures fell $1.25, or 2.28%, to $53.79 per barrel. January Brent crude futures shed $0.98, or 1.63%, to $59.26 a barrel. December gasoline futures plunged $0.035, or 2.15%, to $1.58 per gallon. December heating oil futures declined $0.04, or 2.13%, to $1.86 a gallon. 

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