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Natural Gas Surges 1% Despite Higher US Supplies

April 25, 2019 at 16:39 by Andrew Moran

Natural gas futures are rallying on Thursday after the US government reported an increase in domestic inventories that kept up with market forecasts. The industry is buzzing on reports that the White House is considering waiving a US ship mandate for natural gas as part of a century-old policy that many say has hurt parts of the national economy.

May natural gas futures climbed $0.025, or 1.02%, to $2.48 per million British thermal units (btu) at 15:41 GMT on Thursday on the New York Mercantile Exchange. Despite its modest performance towards the end of the trading week, it is on track for a disappointing five sessions. Year-to-date, natural gas prices are down nearly 8%.

According to the US Energy Information Administration (EIA), domestic natural gas inventories increased by 92 billion cubic feet for the week ending April 19. This is in line with the median estimate of 90 billion cubic feet. In total, stockpiles stand at 1.339 trillion cubic feet, up 55 billion cubic feet from the same time a year ago. They are also 369 billion below the five-year average.

Energy companies, the shipbuilding industry, and US-owned vessels are paying close attention to reports that President Donald Trump might waive a requirement that only US-flagged ships can transport natural gas from American ports to Puerto Rico or the northeast. Bloomberg is reporting that the administration is divided on the issue, and that special interests will defend the 100-year-old Jones Act that mandates vessels moving cargo between two US ports be built, owned, and crewed by Americans.

Meanwhile, an op-ed in RealClearEnergy, titled “America Needs More Oil and Natural Gas Pipelines,” has gone viral in the business community, arguing against the ideas behind the Keep It in the Ground movement. Jude Clemente writes that the country needs even more natural gas, not less.

For example, Pennsylvania has proven how more natural gas can help drastically lower emissions in the power sector. Gas is also the required backup fuel for intermittent wind and solar power, for those frequent times when ‘the wind doesn’t blow’ and ‘the sun doesn’t shine.’

In other energy commodities, June West Texas Intermediate (WTI) crude oil futures dipped $0.09, or 0.14%, to $65.80 per barrel. June Brent crude futures tacked on $0.40, or 0.54%, to $74.97 a barrel. June gasoline futures edged up $0.01, or 0.68%, to $2.08 a gallon. June heating oil futures added $0.05, or 0.32%, to $2.10 per gallon.

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