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How Did the Weekly EIA Data Impact the Natural Gas Market?


The U.S. Energy Department’s weekly inventory release showed that natural gas supplies increased more than expected. The bearish inventory numbers affected natural gas futures, which settled with a loss week over week.
However, signs of production pullback, resurgence of LNG exports, and heatwave-related summer demand are set to support near-term prices. The commodity is already on an upswing, gaining some 30% in May — its best monthly performance since July 2022 — driven by an improved macro backdrop.
Considering that the space remains highly susceptible to unpredictable weather patterns that impact prices and market stability, at this time we advise investors to snap up Buy-rated stocks like Coterra Energy (NYSE: CTRA) and hold onto others like Cheniere Energy (NYSE: LNG).

EIA Reports a Build Slightly Larger Than Market Expectations

Stockpiles held in underground storage in the lower 48 states rose 71 billion cubic feet (Bcf) for the week ended Jun 14, above the analyst guidance of a 69 Bcf addition. The increase compared with the five-year (2019-2023) average net injection of 83 Bcf.
The latest increase puts total natural gas stocks at 3,045 Bcf, 343 Bcf (12.7%) above the 2023 level and 561 Bcf (22.6%) higher than the five-year average.

Natural Gas Prices Finish Lower

Natural gas prices trended southward last week, following the higher-than-expected inventory build. Futures for July delivery ended Friday at $2.71 on the New York Mercantile Exchange, down some 6.1% from the previous week’s closing. Despite this dip, the commodity has been resurgent over the past couple of months — gaining 13% in April, followed by 30% in May — and wiped out all its deficit since the start of this year to be up nearly 8% in 2024.
Investors should know that natural gas realization has been under pressure from strong production, elevated stockpiles, and tepid weather-related demand. It’s worth mentioning that the current inventory levels are …

Full story available on Benzinga.com

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