NEW YORK: US natural gas futures rose about 3% to a 10-week high on Thursday on a bigger than expected storage draw, a preliminary decline in output and forecasts for more power generation and liquefied natural gas (LNG) export demand for gas over the next two weeks.
The US Energy Information Administration (EIA) said utilities pulled 33 billion cubic feet (bcf) of gas from storage during the week ended April 1. Analysts said storage withdrawal was due to cold weather last week and was likely the last decrease of the winter heating season.
That was higher than the 26-bcf withdrawal analysts forecast in a Reuters poll and compares with an increase of 19 bcf in the same week last year and a five-year (2017-2021) average increase of 8 bcf.
Last week’s decline cut stockpiles to 1.382 trillion cubic feet (tcf), or 17.1% below the five-year average of 1.667 tcf for this time of the year.
US front-month gas futures rose 15 cents, or 2.5%, to $6.179 per million British thermal units (mmBtu) at 10:37 a.m. EDT (1437 GMT), putting the contract on track for its highest close since Jan. 27.
US gas futures have soared about 65% this year with much higher prices in Europe keeping demand for US LNG near record highs as several countries wean themselves off Russian gas after Moscow invaded Ukraine on Feb. 24, an action Moscow calls a “special military operation.”
European gas slid about 2% to around $33 per mmBtu on mild weather and ample LNG imports.
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