Home / Oil & Energy / General Energy News / U.S. natgas eases into tight range on higher supply, mild weather view

U.S. natgas eases into tight range on higher supply, mild weather view

U.S. natural gas futures retreated from a one week high in volatile trading on Tuesday, pressured by higher supply and a milder weather outlook.

The market is expected to remain hemmed in a tight range as traders hunt for fresh catalysts.

Front-month gas futures NGc1 for May delivery on the New York Mercantile Exchange (NYMEX) were 1.9 cents, or 0.9%, lower at $2.15 per million British thermal units (mmBtu) by 10:19 EDT after climbing to more than one-week high earlier in the session. Prices had risen by 8% in the previous session, driven by short covering.

“Prices will likely trade in a range due to lack of news on both the supply and demand side. The market continues to be over-supplied while April and May are not very big weather driven demand months,” said Robert DiDona of Energy Ventures Analysis.

“If we cycle out of the maintenance season faster than normal, it could be bearish for prices but if maintenance season continue for longer then market may not be over-supplied anymore,” DiDona added.

Refinitiv said average gas output in the U.S. Lower 48 states has risen to 100.1 billion cubic feet per day (bcfd) so far in April, up from 98.7 bcfd in March and compared with a monthly record of 100.4 bcfd in January.

“We still see the May contract trading range bounded largely by about $1.95 on the downside and 2.25 on the upside,” said Ritterbusch and Associates in a note.

“The expected expansion in the storage surplus, possibly through the rest of this month, is apt to be a bearish dynamic that this gas market will have difficulty ignoring.”

Climate ministers of the Group of Seven countries have backtracked for now on earlier language touting growing future demand for liquefied natural gas (LNG), instead noting there may be “considerable uncertainty” for consumption.
Source: Reuters (Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Alexander Smith)

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping