Natural gas prices have been under pressure lately with seasonally warmer temperatures, so the potential for a sharper bounce was in the technical set up.
That's what Art Hogan, Chief Market Strategist at B. Riley Wealth, told Rigzone late Thursday when asked why the U.S. natural gas price was rising that day.
Hogan also highlighted to Rigzone that the U.S. Energy Information Administration's (EIA) latest weekly petroleum status report "was constructive for natural gas in both the production component and the storage information". That EIA report was released on Wednesday and included data for the week ending October 18.
When he was asked on Thursday why the U.S. natural gas price was rising that day, Phil Flynn, a Senior Market Analyst at the PRICE Futures Group, told Rigzone yesterday, "we seem to be pricing in the possibility of some cold weather and short covering ahead of the EIA report".
"There is also more focus on the Euro market where prices have been riding ... a sympathy rally includ[ing]... long term projections of exclusive demand from India and China," he added.
Flynn told Rigzone that U.S. and global manufacturing data was also supportive.
On Thursday, the EIA released its natural gas weekly update and its weekly natural gas storage report. The former included data for the week ending October 23 and the latter included data for the week ending October 18.
In a natural gas market summary, Frederick J. Lawrence, the ex-Independent Petroleum Association of America (IPAA) Chief Economist, told Rigzone that warmer weather has continued in the Western and Central parts of the U.S. over the past week, but warned that this is expected to change soon.
"Weather forecasts are predicting colder systems in the East in addition to other parts of the U.S.," he noted in the summary, which he sent to Rigzone yesterday.
"A warmer winter could play a key role in limiting natural gas consumption but there are other factors as well that are impacting the market outlook," he added.
Lawrence told Rigzone that storage for natural gas in the U.S. remains robust.
"The natural gas storage report ... issued by the EIA ... [Thursday] revealed a net increase of 80 billion cubic feet (bcf) from the previous week," he highlighted.
"Working gas in storage was 3,785 Bcf on Friday, October 18, 2024, according to EIA. Stocks were 106 Bcf higher than last year and 167 Bcf above the five-year average of 3,618 Bcf," he added.
In the summary, Lawrence told Rigzone that producers remain cautious on the natural gas market outlook and continue to reduce drilling activity toward natural gas.
"Last Friday, the Baker Hughes rig report showed that natural gas-directed rotary rigs dropped two to hit 99, which compares to 118 a year ago," he pointed out.
Lawrence also noted that, "on the LNG front, project start-up delays, which include the large Golden Pass LNG project, will additionally weigh on natural gas export demand".
"Other projects (Rio Grande and Texas LNG) are facing court-related delays that will impact supply-related projections. These project delays add to the current LNG export permitting pause which limit growth potential of LNG in the near-term," he added.
B. Riley Wealth's website notes that Hogan's "distinguished financial industry career spans 30+ years, during which he has concentrated on the U.S. equity markets". The site points out that Hogan has served as a member of the Board of Governors of Boston Stock Exchange, Inc., and a member of the Board of Directors of NASDAQ OMX BX, Inc.
B. Riley Wealth offers a world-class wealth management and financial planning platform designed to provide clients with a full suite of services including brokerage, investment management, insurance and tax preparation services, B. Riley's website states.
Flynn is described on the PRICE Futures Group website as "one of the world's leading energy market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets". Flynn is also a daily contributor to Fox Business Network, the site highlights.
According to its website, the PRICE Futures Group's mission is to "provide traders and investors with industry-leading trading solutions, informative market analysis, and cutting-edge technologies which enable efficient decision-making".
The IPAA has represented independent oil and natural gas producers for more than 90 years, its site states. The organization describes itself as a national upstream trade association representing thousands of independent oil and natural gas producers and service companies across the United States.