Natural gas recovers late-week with supply and demand in focus.
The Aug-2021 NYMEX natural gas contract pushed 7.5 cents higher to $3.749 per MMBtu amid continued strength in overall national cooling demand. The Aug-2021 WTI crude oil contract declined 46 cents to $74.10 per barrel on demand concerns after G20 finance chiefs said the spread of coronavirus variants and uneven access to vaccines threatened the global economic recovery. Equity markets bounced higher ahead of the start of second quarter earnings season as investors looked to gauge the health of the economic recovery.
Natural gas edged 5.3 cents lower to $3.696 as the weather forecast called for widespread below normal temperatures in the South and Mid-Atlantic, which offset persistent heat in the West. Crude oil rebounded $1.15 to $75.25 ahead of Wednesday’s inventory report, which was expected to show another draw in U.S. supplies. Equities retreated as consumer inflation data revitalized concerns over the potential negative impacts on the economic recovery.
Natural gas shed 3.6 cents to settle at $3.660 on profit-taking after updated weather forecasts showed an extension of cooler trends in the 8-14-day period. Crude fell $2.12 despite a 7.9 Mb decline in inventories after the UAE and Saudi Arabia reached a compromise to lift their baseline output quota and on news Chinese oil imports fell by 3%, the first contraction since 2013. Stocks advanced even after the BLS reported wholesale inflation jumped to its highest annual pace in over 10 years.
Natural gas lost another 4.6 cents to close at $3.614 after the EIA reported a larger-than-expected 55 Bcf injection into storage, which marginally narrowed the deficit to the 5-year average to 189 Bcf. Crude oil settled $1.48 lower at $71.65 after data from the weekly inventory report showed U.S. production climbed to a 14-month high. Equities were mixed on the day after Federal Reserve Chairman Jerome Powell said inflation would likely remain elevated in the coming months before moderating.
Natural gas rebounded 6.0 cents to end the week unchanged at $3.674 as traders focused on the tightness in the market with production sliding to around 91 Bcf per day. Oil inched 16 cents higher to $71.81 as traders covered short positions following 2 days of steep losses. Stocks tumbled lower as growing inflation concerns outweighed an unexpected jump in retail sales during the month of June.
Natural gas traders will continue to closely follow the pace of storage injections to forecast pre-winter levels.
Explore More: The European Energy Market Report
Don’t miss the latest energy market watch updates. Subscribe to receive a weekly email below.