US natgas soars over 7.0 per cent amid forecasts of higher demand
by SOURAV D | VIEW 1500
On Friday, in a holiday-thinned trading session, US natgas futures prices leapt over 7 per cent, shelving their best weekly percentage gain in more than two months, mostly driven by a forecast that US heating demand would likely to step up than previously expected during the winter. Meanwhile, addressing to a surprisingly colder weather over recent past which would likely to sustain according to a weather forecast, Energy Ventures Analysis’ Robert DiDona said, “With colder weather coming up, traders are out there saying 'Okay, we can buy.’ The market has largely been bouncing back and forth in a small range, and then we finally got some short covering on a thin day”.
US natgas futures’ prices jump as US average gas demand projected higher
Besides, Friday’s uptick in US natgas futures came against the backdrop of a Refinitiv data that had estimated that US gas demands would shoot up to 112.8 bcfd (billion cubic feet per day) next week from a reading of 112.0 bcfd logged this week, as weather would turn colder and manufacturers would have to lighten up more heaters.
Nevertheless, despite Friday’s gains, US natgas prices were still hovering at one-sixth of those in Europe and about one-seventh of Asian contracts, as the United States had reportedly built up a large winter stockpile with ample rooms for further productions.
Citing statistics, compared to a $5mmBtu natgas futures’ prices in the United States, European and Asian benchmarks have been witnessing about $30mmBtu and $36mmBtu respectively. With traders across the globe becoming utterly interested on US natgas amid Kremlin’s reluctance to produce more gases, a colder-than-anticipated US winter coupled with an increase in global demand would likely to perk up natgas futures’ prices over coming weeks, suggested analysts.