May 1, 2016 – 24/7 Wall St
Natural Gas Price Ticks Higher After Storage Report
By Paul Ausick
The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 68 billion cubic feet for the week ending April 29. Analysts were expecting a storage addition of around 69 billion cubic feet. The five-year average for the week is an injection of around 64 billion cubic feet, and last year’s storage addition for the week totaled 77 billion cubic feet. Natural gas inventories rose by 73 billion cubic feet in the week ending April 22.
Natural gas futures for June delivery traded down about 1.5% in advance of the EIA’s report, at around $2.11 per million BTUs, and traded around $2.12 after the data release. Last Thursday, natural gas closed at $2.08 per million BTUs. On Friday the contract posted its high for the past five trading days at $2.20. The 52-week range for natural gas is $1.84 to $3.20. One year ago the price for a million BTUs was around $3.05.
Natural gas prices have been rising fitfully since their early March low of $1.84 per million BTUs. How high prices will go and how long the increases will last are the salient points. RBN Energy offers this summation:
[G]iven the size of the storage surplus , injections into storage will need to be consistently below what they have been historically in these months if the market is to prevent a storage capacity shortage (and further price discounts) by fall 2016. And that will require supply/demand to tighten relative to recent years, either due to lower supply or higher demand or some combination of the two.
Read the full story here: http://247wallst.com/energy-economy/2016/05/05/natural-gas-price-ticks-higher-after-storage-report-2/
