Natural gas moves higher despite storage data
Investing.com
Published Apr 21, 2016 10:37AM ET
Natural gas gains ground on stronger market sentiment
Investing.com - U.S. natural gas prices moved higher on Thursday, despite data showing that stockpiles rose more than expected last week, as risk sentiment remained supported by higher oil prices.
On the New York Mercantile Exchange, natural gas for delivery in May was up 0.63% to $2.081 per million British thermal units. Prices were at around $2.075 prior to the release of the supply data.
In its weekly report, the Energy Information Administration said natural gas storage in the week ended April 15 rose by 7 billion cubic feet, compared to expectations for an increase of 4 bcf.
Total U.S. natural gas storage stood at 2,484 bcf the EIA said. Stocks were 881 bcf higher than last year at this time and 811 bcf above the five-year average of 1,673 bcf for this time of year.
Oil prices were moving lower after the report, but sentiment remained supported as crude rose to its highest level since November earlier Thursday, after the International Energy Agency said 2016 would see the biggest fall in non-OPEC production in a generation.
The recovery in oil prices drove global stocks and commodity markets higher.
A warmer-than-normal 2015-2016 winter in the U.S. reduced demand for natural gas as an indoor-heating fuel.
Sluggish demand combined with record high production levels has pushed the natural-gas market into oversupply. Stockpiles are currently standing at more than 50% above their five-year average for this time of year.
The demand outlook is expected to moderate with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning, but analysts don’t expect the glut of natural gas to shrink until next winter or later.
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Written By: Investing.com
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