LNG - Why Did U.S. Natural Gas Prices Move Up 16.6% Last Week? | Benzinga
The U.S. Energy Department's weekly inventory release showed that natural gas supplies increased less than expected. The positive inventory numbers, together with signs of production pullback and upcoming summer demand, buoyed natural gas futures, which settled with a healthy gain week over week.
Despite this spike, which saw natural gas hit its highest since January, the space remains highly susceptible to unpredictable weather patterns, impacting prices and market stability.
At this time, we advise investors to focus on stocks like Coterra Energy (NYSE: CTRA) and Cheniere Energy (NYSE: LNG).
EIA Reports a Build Smaller Than Market Expectations
Stockpiles held in underground storage in the lower 48 states rose 70 billion cubic feet (Bcf) for the week ended May 10, below the guidance of a 76 Bcf addition, per a survey conducted by S&P Global Commodity Insights. The increase compared with the five-year (2019-2023) average net injection of 90 Bcf and last year's growth of 93 Bcf for the reported week.
The latest increase puts total natural gas stocks at 2,633 Bcf, which is 421 Bcf (19%) above the 2023 level and 620 Bcf (30.8%) higher than the five-year average.
The total supply of natural gas averaged 104.5 Bcf per day, up 0.2 Bcf per day on a weekly basis due to higher dry production, partly offset by lower shipments from Canada.
Meanwhile, daily consumption fell to 94.5 Bcf from 95.5 Bcf in the previous week, mainly reflecting a drop in natural gas consumed for power generation.
Natural Gas Prices Finish Sharply Higher
Natural gas prices trended northward last week following the lower-than-expected inventory build. Futures for June delivery ended Friday at $2.49 on the New York Mercantile Exchange, up some 16.6% from the previous week's closing. As a matter of fact, the commodity's resurgence over the past few weeks wiped out all of its losses since the start of this year.
Investors should know that natural ...