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Natgas trades higher as US cold snap bites back Natgas trades higher as US cold snap bites back Natgas trades higher as US cold snap bites back

Natgas trades higher as US cold snap bites back

Commodities 4 minutes to read
Ole Hansen

Head of Commodity Strategy

Summary:  Diverging northern hemisphere weather patterns are playing on natural gas prices on both sides of the Atlantic divide.

Update: The weekly stock report from the US Energy Information Administration showed a smaller than expected drop in US natural gas inventories last week. The 166 bcf reduction initially triggered a small correction but prices quickly recovered, supported by the aforementioned cold front and the fact that the deficit relative to the five-year average rose to 424 bcf or 21.6%. 

EIA data

While Europe has been basking in glorious sunshine and temperatures well above the seasonal average, the opposite can be said for the US. The short-term outlook from US NOAA shows a very high probability of colder than normal temperatures for the next 6 to 10 days across most of the US. So while gas prices in Europe has seen downward pressure this past month, US natural gas has continued to climb higher after once again finding support ahead of $2.50/therm.

The EIA will publish its weekly stock report at 15:30 GMT today. Analysts expect a larger-than-normal inventory draw of 174 bcf, well above the five-year average of 104 bcf.

Following another roller coaster winter where prices have been dealing with bouts of cold weather together with rising production, the price has once recovered after finding support ahead of key support at $2.52/therm. 
Source: Saxo Bank

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