U.S. natural gas futures reversed earlier losses and closed higher after digesting a larger-than-expected storage build. The market’s initial reaction to the Energy Information Administration (EIA) report, which showed a 37 billion cubic feet (Bcf) injection into storage last week, was a decline in prices. However, prices later recovered as traders shifted their focus to the upcoming summer season and its potential impact on demand.
The EIA’s report revealed that inventories now stand at 1,744 Bcf, reducing the deficit against the five-year average and year-ago levels. Despite this, concerns remain about how quickly the market will recover, particularly given the slow pace of production growth. Andy Huenefeld, a senior analyst at Pinebrook Energy Advisors, noted that the lack of additional selling pressure suggested strong underlying support. He cautioned that the injection season is starting early, but inventories are still significantly behind last year’s levels, and the market will need to keep an eye on the pace of future injections.
The April Nymex contract closed at $3.95 per million British thermal units (mmBtu), up 2.3%, with the May contract settling at $3.925, a 1.4% increase.
Meanwhile, in the European market, natural gas prices saw a slight uptick as Russia’s announcement regarding repairs to the Sudzha cross-border gas point raised concerns about future gas flows. The benchmark Dutch TTF contract rose by 0.5%, reaching 41.10 euros per megawatt hour. This followed a drop in the previous session amid ongoing Black Sea ceasefire discussions, warmer weather forecasts, and a steady supply of liquefied natural gas (LNG). According to Russian officials, repairs to the gas metering station in the Kursk region, which was transporting gas to Europe before January, would take longer than expected. As a result, Russian gas flows through Ukraine are unlikely to resume in time for the summer injection season, according to Rabobank’s energy strategist Florence Schmit.
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