NEW YORK: US natural gas futures fell on Friday en route to their first weekly dip in six, with the pullback from 13-year peaks scaled earlier in the week hastened by a larger-than-expected weekly storage build. Front-month gas futures were down about 4% at $6.686 per million British thermal units by 11:54 a.m. EDT (1554 GMT).
Prices were headed for a more than 8% decline for the week, which would be the worst performance since Feb. 11.
US Energy Information Administration data showed utilities added 53 billion cubic feet (bcf) of natural gas to storage last week, compared with analysts’ expectations of a smaller-than-usual 37 bcf build.
However, US gas stockpiles are still currently 16.8% below the five-year (2017-2021) average for this time of year.
US gas futures have soared about 79% so far this year with much higher prices in Europe keeping demand for US LNG near record highs as several countries try to wean themselves off Russian gas after Moscow invaded Ukraine on Feb. 24.
Prices hit a 13-year high of $8.065 per mmBtu on Monday driven by expectations of an unusually cold April, but have since retreated as weather forecasts turned more moderate.
“The recent gas price roller coaster ride certainly has caught everyone’s attention,” said Zhen? Zhu, managing consultant at C.H. Guernsey and Company in Oklahoma City.
“As the gas market becomes more and more internationally integrated, we will definitely see the convergence in gas prices with the US price rising to eliminate or narrow down that gap.”
Data provider Refinitiv estimated there would be 126 heating degree days (HDDs) over the next two weeks in the lower 48 US states, slightly above the 30-year norm of 116 HDDs for this time of year. The estimate is higher than Thursday’s forecasts.
HDDs, used to estimate demand for heating of homes and businesses, measure the number of days a day’s average temperature is below 65 degrees Fahrenheit (18 Celsius).
Refinitiv projected average US gas demand, including exports, would drop from 98.4 bcfd this week to 92.7 bcfd next week.
Meanwhile, data from Refinitiv showed average gas output in the US lower 48 states was at 94.4 billion cubic feet per day (bcfd) so far in April, down from 93.7 bcfd in March, and well below December’s monthly record of 96.3 bcfd.
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