• FxWirePro: U.S. natural gas inventory preview

    Source: FxWire Pro - Commentary / 19 Jul 2018 09:53:06   America/New_York

    Natural gas is currently trading at $2.71 per MMBtu.

    Key factors at play in the natural gas market –

    • As expected, Natural gas reached $3-$3.1 area and sellers emerged again. The price is now going down sharply as it failed to clear the resistance around the area.
    • The spread between U.S. gas prices and the rest of the world is rising again. In Japan, it reached close to $10 per MMBtu.
    • However, in the United States, we expect the natural gas price to decline further towards $2.55 area.
    • U.S. production is rising fast. The country is likely to become a net gas exporter by 2019.
    • U.S. exit from Iran nuclear agreement complicates the future of vast natural gas reserves in Iran.
    • NATO sanctions on Russia might disrupt its gas supplies to Europe.
    • Russia says world’s biggest pipeline for natural gas connecting China and Russia is almost complete.
    • With geopolitical tensions rising between Russia and the United Kingdom and other European nations, the U.S. looking to fill in the shoes of Russia in terms of gas supply to the region.
    • With natural gas turning into a buyers’ market, big importers like Japan are renegotiating long-term contracts with a resale clause attached.
    • Russia and the United States are set to fight for market share in Asia and in Europe. US preparing to become major natural gas exporter to the EU and Asia.
    • Australia looking to beat Qatar to become the world’s largest Ngas supplier.
    • Large Natural gas producers in the United States continue to expand production per rig. US exports are increasing significantly.
    • The United States remains the largest petroleum and natural gas producers in the world.

    Now, for the inventory,

    According to the latest numbers, working gas in the underground storage remains at 2.203 trillion cubic feet (Tcf). Stocks are 725 Bcf less than last year at this time and 519 Bcf below the five-year average. The chart from EIA shows the level of inventory. The second chart from investing.com shows weekly changes in inventory.

    • Last week, the inventory rose by 51 billion cubic feet against an expectation of 55 billion cubic feet increase. Today 37 billion cubic feet build expected.
    • EIA will release the inventory report at 14:30 GMT.

     

     

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