FINWIRES · TerminalLIVE
FINWIRES

US Natural Gas Update: Prices Jump on Small Inventory Build

By

US natural gas futures climbed in midday trading Thursday after government data showed a smaller-than-expected storage build.

The front-month Henry Hub contract and the continuous contract both rose by 4.29% to $3.352 per million British thermal units.

The rally followed data from the US Energy Information Administration showing working gas in underground storage increased by 95 billion cubic feet for the week ending May 29. That came in below analyst expectations for a 99-105 Bcf build.

Total inventories now stand at 2,578 Bcf, 3 Bcf below year-ago levels but 138 Bcf above the five-year average of 2,440 Bcf, and remain within the historical range.

Pinebrook Energy Advisors noted this is the first time since February that stocks have dipped below year-ago levels and the surplus to the five-year average narrowed modestly following the smaller build.

Prices were already trending higher ahead of the storage release, supported by hotter weather forecasts that are expected to lift cooling demand. Forecast models point to widespread 90-degree Fahrenheit-plus temperatures across major Northeast population centers.

Tradition Energy analyst Gary Cunningham said the heat could "firm up the fundamentals for the remainder of summer" and potentially test new Champlain Hudson Power Express transmission line into New York City as cooling demand there is expected to surge.

NatGasWeather.com said it expects to upgrade its demand outlook to "Moderate" from "Low" on Friday as the heat spreads across much of the US, including triple-digit readings in parts of the Southwest.

On the export side, LNG feedgas flows remain under pressure from scheduled maintenance. Barchart, citing data from BNEF, said US export feedgas flows were running near 17 Bcf/d on Wednesday, down roughly 3 Bcf/d from typical capacity utilization above 20 Bcf/d.

In global LNG markets, spot prices were up. EnergyNow.com, citing LSEG data, said prices up rose roughly 75% from February levels, to $18.20/MMBtu.

Earlier spikes reached $25.30/MMBtu in March following disruptions tied to an attack on QatarEnergy's Ras Laffan LNG facility. However, prices remained far below the record spike to $70.50/MMBtu seen in 2022 after Russia's invasion of Ukraine triggered a global supply shock, it said.

Related Articles

Commodities

US Crude Inventories Drop 8 Million Barrels, Cushing Hits New 5-Year Low, TPH Says

US commercial crude inventories fell by 8 million barrels last week, pushing stocks 1% below year-ago levels and 4% below the five-year average, TPH Energy said Thursday.Cushing crude inventories declined by 600,000 barrels to 22.4 million barrels, marking another five-year low, the firm said.Higher crude exports supported the draw as outbound shipments increased by 1.43 million b/d, outweighing a 1.19 million b/d increase in imports, TPH said.The firm said the inventory decline also reflected a 349,000 b/d drop in the adjustment factor and an 8,000 b/d decrease in domestic production to 13.707 million b/d.Four-week average crude imports remained 4% below year-ago levels, while four-week average crude exports increased 42% from a year earlier, according to TPH.Refiners reduced crude processing rates by 90,000 b/d, leaving refinery runs 1% below year-ago levels, the firm said.Ethanol inventories fell by 400,000 barrels to 24.6 million barrels as exports strengthened, although inventories remained at a seasonal high while production reached another five-year high, TPH said.Gasoline inventories increased by 3.4 million barrels and distillate stocks rose by 1.5 million barrels, missing consensus forecasts for declines of 2.5 million barrels and 2 million barrels, respectively, TPH said.Jet fuel inventories also climbed by 400,000 barrels, although gasoline, distillate and jet fuel demand remained stronger than year-ago levels despite weaker week-over-week consumption, the firm said.The four-week average for light product demand improved to 1% above year-ago levels from 1% below previously, while net export growth slowed to 60% from 72%, with gasoline demand at 1%, distillate at 1% and jet fuel at 0%, TPH said.

Commodities

Supply Disruptions Lift Refiner Q2 EPS Outlook Above Consensus, TPH Energy Says

TPH raised its average second-quarter 2026 earnings estimate for refiners to $6.38 per share from $5.67, exceeding the $5.40 consensus forecast and sharply above Q1 earnings of $0.59 per share, the firm said Thursday.TPH said supply disruptions tied to the US-Iran conflict continue to support refining fundamentals and improve earnings expectations across the sector.The International Energy Agency expects global refinery runs to fall to 78.7 million barrels per day in the second quarter from 83.6 million b/d in Q1 and 82.9 million b/d a year earlier, TPH said.TPH said shipping disruptions in the Strait of Hormuz and refinery damage linked to the conflict are reducing global fuel supplies.US gasoline cracks increased by about $20 per barrel over the quarter to $25/bbl, compared with a five-year average of $20/bbl, the firm said.US diesel cracks climbed by roughly $21/bbl to $48/bbl, more than double the five-year average of $22/bbl, TPH said.The West Coast, Southwest and Rocky Mountain regions posted the strongest margin gains relative to historical averages, while the Mid-Continent and Midwest regions lagged, according to the firm.US refiners increased operating rates to address supply shortages, pushing utilization to 91% in the second quarter from a five-year average of 89%, TPH said.Higher operating rates helped gasoline exports reach 880,000 b/d and distillate exports rise to 1.56 million b/d, above five-year averages of 828,000 b/d and 1.19 million b/d, respectively, the firm said.TPH said tighter availability of Middle Eastern medium-sour crude has narrowed crude differentials, although Western Canadian Select prices at Hardisty and Houston remain under pressure from constrained Canadian pipeline capacity.The firm added that stronger backwardation is creating a $ 5/bbl-over-the-quarter headwind for inland US crude barrels, while elevated tanker costs are weighing on coastal markets.TPH expects lower crude prices, wider West Coast jet fuel premiums, reduced downtime and a $4/bbl increase in octane spreads to support second-quarter capture rates.However, the firm said rising Renewable Volume Obligation costs approaching $4/bbl, tighter crude differentials, weaker butane blending demand and the $5/bbl WTI structure impact remain key challenges.TPH forecast group capture rates of 73% in the second quarter, compared with 72% in the first quarter.The firm said renewable diesel indicators improved by $1.39 per gallon, Midwest ethanol margins increased by $0.33/gal, polyethylene chain margins rose by $0.40 per pound and $0.32/lb, while UAN and ammonia fertilizer prices advanced 33% and 27%, respectively.TPH said potential Small Refinery Exemption proceeds could equal 23% of market capitalization for Delek US Holdings (DK), 7% for Par Pacific Holdings (PARR), and 4% each for HF Sinclair (DINO) and CVR Energy (CVI), assuming partial waivers for all applications.TPH said its second-quarter earnings forecasts exceed consensus estimates for Par Pacific Holdings, HF Sinclair, Phillips 66 (PSX) and Valero Energy (VLO), while its estimate for CVR Energy remains below consensus.Price: $47.19, Change: $+0.01, Percent Change: +0.02%

$CVI$DINO$DK$PARR$PSX$VLO
Commodities

Cheniere Advances Corpus Christi Expansion Amid Tightening LNG Outlook, RBC Says

Cheniere Energy (LNG) is moving closer to a final investment decision on its Corpus Christi LNG expansion after issuing a limited notice to proceed on Phase 1 of its Sabine Pass Liquefaction expansion project, RBC Capital Markets strategists said in a note on Wednesday.RBC analysts said the move on the SPL Train 7 expansion was slightly ahead of investor expectations, noting that the engineering, procurement, and construction agreement with Bechtel effectively locks in pricing of about $4.68 billion for over 6 million tons per annum of capacity.The analysts said most of the cost reflects labor, consistent with the project's brownfield nature.Cheniere is targeting permit approvals by the end of 2026, with FID expected in early 2027. The energy firm said the expansion is already commercially complete, with permitting remaining the main gating item.On contracting, Cheniere said it has not yet fully commercialized Corpus Christi Train 4 but continues to see a constructive environment for long-term LNG agreements.The company said counterparties are seeking shorter-term supply in the near term due to geopolitical disruptions, while maintaining interest in longer-term portfolio diversification.RBC said Cheniere's management also reiterated a positive view on global LNG fundamentals, arguing that current TTF pricing does not fully reflect supply constraints and demand shifts, including delays to Qatar's North Field expansion and temporary outages at QatarEnergy facilities.Cheniere said the disruptions have pushed expectations of LNG oversupply out by one to two years as demand continues to absorb incremental capacity.The US LNG producer said it remains well positioned as one of the few regions capable of adding meaningful new global liquefaction capacity.On capital allocation, RBC said Cheniere management prefers share buybacks over significant dividend increases, citing greater flexibility and the potential for opportunistic repurchases.Price: $238.75, Change: $+3.38, Percent Change: +1.43%

$LNG