U.S. natural gas futures retreated more than 2% on Thursday on forecasts for less demand for the fuel next week in the run-up to a federal report expected to show nearly a normal injection into stockpiles.
Front-month gas futures for May delivery on the New York Mercantile Exchange (NYMEX) were down 6.1 cents, or 2.9%, by 10:29 a.m. EDT.
“Between yesterday and this morning it is continuation of profit-taking ahead of the storage report as we approached the $2.00 mark,” said Robert DiDona of Energy Ventures Analysis.
“We believe that prices are going to consolidate as there’s not a huge demand or supply driver here that will help us break us away from the current price range.”
U.S. utilities likely put a near-normal 28 billion cubic feet (bcf) of natural gas in storage last week, a Reuters poll showed on Wednesday. That compares with an 8 bcf injection during the same week a year ago and a five-year (2018-2022) average rise of 28 bcf.
If correct, last week’s injected would lift stockpiles to 1.858 trillion cubic feet (tcf), or 19% above the five-year average.
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. That compares with a monthly record of 100.4 bcfd in January 2023.
It also forecast that U.S. gas demand, including exports, would dip from 97.0 bcfd this week to 94.0 bcfd next week.
Meanwhile, data provider Refinitiv estimated 103 heating degree days (HDDs) over the next two weeks in the lower 48 U.S. states. The normal for this time of year is 146 HDDs.
HDDs estimate demand to heat homes and businesses by measuring the number of degrees a day’s average temperature is below 65 degrees Fahrenheit (18 degrees Celsius).
Meanwhile, Russian gas giant Gazprom said that Europe’s ability to maintain ample gas stocks in the 2023/2024 winter hinges on Asia’s demand given “critically low” supplies from Russia.