FxWirePro: U.S. Natural gas inventory preview

Natural gas is currently trading at $2.98 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 spread between U.S. gas prices and the rest of the world is rising again. In Japan, it reached close to $12 per MMBtu.
• 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 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 1.913 trillion cubic feet (Tcf). Stocks are 785 Bcf less than last year at this time and 507 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 96 billion cubic feet against an expectation of 90 billion cubic feet increase. Today 85 billion cubic feet build expected.
• EIA will release the inventory report at 14:30 GMT.

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