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(Bloomberg) – US natural gas futures rose after winter inventories of blast furnace and power plant fuel expanded less than expected, adding to concerns about adequate supplies during the peak demand season.
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Gas prices have more than doubled this year and the peak winter season is weeks away in large cities like Chicago, which rely heavily on fuel to heat residential buildings. Futures rose nearly 7% on Thursday after a government balance sheet of underground vital supplies showed a weaker-than-expected increase as time ran out to increase inventory. The rise was dampened by bearish midday weather forecasts towards the end of the session.
Energy prices are skyrocketing around the world as winter exposes growing gas, electricity and coal supply shortages in the northern hemisphere, forcing some manufacturers to shut down factories. Post-pandemic economic recovery could be at risk in some of the world’s largest economies as unprecedented pressure forces governments and regulators to make tough decisions about whether to sort energy supplies to key sectors.
After rallying nearly 7% earlier in the day, gas closed 1.7% higher at $ 5.687 per million British thermal units for November delivery on Thursday.
Thursday’s high-profile US gas inventory report showed that in-store supplies only increased 81 billion cubic feet last week, far less than Bloomberg’s compiled median of 93 billion. Meanwhile, the Energy Information Administration warned in a separate report that US households will face the highest bills since 2007-2008 this winter.
“This is disappointing for people who want low prices because the hope was that we could put triple-digit injections together to cool prices down, and that’s not happening,” said Phil Flynn, senior market analyst at Price Futures Group.
Flynn’s reference to “three-digit injections” means weekly storage gains of 100 billion or more; There were only two of them all year round.
Part of the day’s earlier rally was cleared after reports showed that milder weather could be likely in the coming days.
(Updates with closing price.)
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