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Natural Gas Slips As Stockpiles Meet Market Expectations

April 18, 2019 at 15:48 by Andrew Moran

Natural gas futures slipped on Thursday after the US government reported that domestic inventories rose as what the market had anticipated. Investors are concerned about a growing global supply glut, especially on news that a Greek energy firm discovered an immense supply of natural gas in Israel.

May natural gas futures tumbled $0.01, or 0.44%, to $2.50 per million British thermal units (btu) at 14:55 GMT on Thursday on the New York Mercantile Exchange. Natural gas prices are headed for a steep weekly loss of about 6%, increasing their year-to-date losses to more than 7%.

According to the US Energy Information Administration (EIA), domestic inventories of natural gas climbed by 92 billion cubic feet for the week ending April 12. This is in line with the median estimate of 90 billion cubic feet. In total, US stockpiles stand at 1.247 trillion cubic feet, down 57 billion cubic feet from the same time a year ago. They are also 414 billion below the five-year average.

This week, Energean, a Greek oil and gas development, announced that it discovered as much as 42 billion cubic meters of natural gas, in addition to the 67 billion cubic meters that were already found, in Israel. Greece, Cyprus, and Israel agreed to construct a $7 billion pipeline will transport 10 billion cubic meters of natural gas in those countries, which will then expand into sending 20 billion cubic feet of natural gas through Europe.

Will this add to the supplies in global markets?

Last week, President Donald Trump signed two executive orders that will inevitably boost the number of natural gas projects. Overall, the US is projected to ramp up production in the coming years. Elsewhere, Saudi Arabia plans to spend $10 billion in natural gas development, China has a five-year plan to become a bigger player in the industry, and the newly-elected Conservative government in Alberta is expected to revamp the province’s energy sector.

In other energy commodities, May West Texas Intermediate (WTI) crude oil futures dipped $0.17, or 0.27%, to $63.59 per barrel. June Brent crude futures edged up $0.07, or 0.1%, to $71.69 a barrel. May gasoline futures tacked on $0.015, or 0.7%, to $2.05 a gallon. May heating oil futures were flat at $2.06 per gallon.

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