Natural gas had a notable decrease of -2.73% yesterday, closing at 217, due to signs of increased driller extraction and worries about the large excess supply still in storage. Prices dropped in the face of a larger-than-expected build in storage, despite projections for higher demand in the next week and increased flow to liquefied natural gas export plants.
In keeping with the continuous seasonal increase in storage levels, U.S. utilities added 84 billion cubic feet of gas, topping predictions and marking the fastest build in over a month. The market is experiencing oversupply concerns because petrol stockpiles are currently at 2,795 billion cubic feet, 15% higher than the previous year and 26% above the five-year average.
While there has been a minor decrease in gas output in the Lower 48 U.S. states in May compared to April, there has been an upswing in recent weeks, suggesting that some drillers have been motivated to increase production due to the recent spike in futures prices. Looking ahead, LSEG projects that next week’s gas demand in the Lower 48 will rise from 93.6 bcfd to 95.1 bcfd, including exports.
