Tuesday, May 17, 2016
Natural gas prices rose Tuesday, snapping a three-session losing streak as bullishness about a rebalancing market helps counter expectations for soft demand.
Natural gas futures for June delivery settled up 1.9 cents, or 0.9%, to $2.048 a million British thermal units on the New York Mercantile Exchange. Before Tuesday’s gains, the market had fallen 6.6% in three straight losing sessions.
Natural-gas inventories stand 44% above the five-year average for this time of year, and stockpiles are expected to keep growing through October as gas companies stash away fuel ahead of the high-demand winter season. Some analysts warn that storage tanks and caverns could run out of room to hold gas by the fall.
But U.S. production has fallen about 3% from a record high average in February, according to Platts Analytics, a forecasting and analytics unit of S&P Global Platts. That has had many traders betting on a rebound, expecting that massive spending cuts among gas drillers will keep slowing production and reduce the glut in the market.
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