U.S. Natural Gas Futures Declined Despite Positive Storage Data

U.S. natural gas futures continue to decline on Thursday in North American trade, despite data showed the less than expected rise in natural gas supplies in the storage in the U.S. last week.

In its weekly report, the U.S. Energy Information Administration stated that natural gas storage in the U.S. increased by 51 billion cubic feet in the week closed October 13, while expectations were at an increase of 55 billion.

Compared with a build of 87 billion cubic feet in the preceding week, futures had been dropping by 0.1 cents, about 0.04%, which translates to $2.853 prior to the release of data. The said comparison represented a decrease of 179 billion from the previous year and was below the five-year average standing at 35 billion cubic feet.

The total U.S. natural gas storage stood 4.7 % lower than the levels in the year earlier at 3.646 trillion cubic feet and 1.0% below the five-year average for this season of year.

After the data release, natural gas for delivery in November on the New York Mercantile Exchange lost 2.1 cents despite bullish reading. This would translate to about 0.74 % or trade at $2.833 per million British thermal units by 10:32AM ET (14:32GMT).

 

Demand for UK Wholesale Natural Gas Falls

A combination of an oversupplied gas system and weaker Brent crude pricing led to UK’s wholesale natural gas prices to decline value on Thursday morning including contracts dropping in early trading exchanges.

According to reports, the UK gas system was seen 9 million cubic meters long following the demand declining to 217 million cubic meters on Thursday. This was despite having it above 240 million cubic meters mid-week.

Demand for UK gas from Continental Europe pulled back with IUK morning nominations for exports to Belguim using the Interconnector at 21 cubic meters on Wednesday after being above 35 million cubic meters.

According to analysts, UK natural gas production for Thursday was set to show little change on the day, with nominations standing at 106 million cubic meters.

In other aspects, Norwegian gas flows were running into the UK National Transmission System at 96 million cubic meters /d Thursday morning, unchanged respectively from Wednesday’s records, according to Gassco, a Norwegian gas operator.

The front-month contract dropped 0.33 p/th  from the previous reports after being poised at 50.17 on Thursday morning, furthermore bearish sentiment for the NBP curve resulted from Brent crude slipping in overnight trade.

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