Natural Gas Futures Rose Ahead of EIA Inventory Data

On Thursday, US natural gas futures jumped over 3.00% ahead of the Energy Information Administration’s weekly inventory report and high expectations of higher demand next week.

The front-month contract at the Henry Hub increased by 3.20% to $7.125 per metric million British thermal units.

The demand for the United States is anticipated to rise further in the upcoming days, more than previously expected.

Prices of NGAS futures were advancing despite a projection of a larger-than-average gas in storage build expected to be reported by the EIA.

The steeper-than-average stock build was estimated due to milder weather conditions in the previous days, the halting of two LNG export facilities, and an increase in wind power generation.

Analysts have gauged a build of 113 billion cubic feet (bcf) of natural gas in the reservoir for the week that ended September 30. Even though this projection is generally in line with the build from the same period last year, it would be higher than the five-year average build in gas storage stocks of 87 bcf.

The demand for American natural gas was delayed due to mild weather and power outages in Florida following Hurricane Ian.

In recent days, there has been more supply availability domestically as the Cove Point LNG export facility in Maryland began a three-week annual planned maintenance last October 01.

Nord Stream Damage

Adding support to high natural gas is the supply crunch in Europe as the Nord Stream pipeline that connects Russia and the EU was recently damaged.

On Thursday, the Swedish Security Service released a statement saying that the destruction was more than likely sabotage from the Russian forces.

Hours after the leaks were detected in late September, Norwegian naval forces disclosed that security alerts were raised after unidentified drones were spotted in the area.

The detected explosion under the Baltic Sea damaged both strings of the operational Nord Stream 1 and 2 systems.