Short-Covering Cited as Natural Gas Prices Climb in ‘Head Scratcher’ Session - Natural Gas Intelligence

Short-Covering Cited as Natural Gas Prices Climb in ‘Head Scratcher’ Session

August Nymex natural gas futures were higher Friday, abruptly ending a three-day routing to close the week with a 6.1-cent gain, as traders covered short positions and anticipated a demand boost.

At a Glance:

- Futures gain
- Heat rises
- Cash stumbles

Updated Jul 12, 2024

7/12/24

August Nymex natural gas futures were higher Friday, abruptly ending a three-day routing to close the week with a 6.1-cent gain, as traders covered short positions and anticipated a demand boost.

Against a backdrop of strong production, hefty supplies in storage and a demand-thwarting hurricane, natural gas forward prices struggled for direction and ultimately gave up ground.

Natural gas futures seesawed between gains and losses early Friday as traders weighed a coming stretch of severe heat against mounting surpluses – and the slow recovery in Texas from Beryl.

August Nymex natural gas futures deepened losses Thursday despite excessive heat across much of the country. The market appeared to defy the outlook for heavy gas demand in favor of robust supplies.

August natural gas futures held to the downside Thursday following the U.S. Energy Information Administration (EIA) storage report for the week ending July 5, which outlined a 65 Bcf build, in line with the high end of expectations and above historical averages.

Energy-intensive bitumen production in the Alberta oilsands, along with rising natural gas-fired power generation, are expected to drive substantial growth in the province’s gas demand over the next nine years, according to the government.

Natural gas futures traded lower early Thursday as traders awaited updated government inventory data and whether the third largest U.S. LNG terminal was close to restarting.

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