Natural gas storage levels in the United States remained as anticipated last week, with weather forecasts showing little change. Nevertheless, U.S. gas prices witnessed a remarkable 6% rally on Thursday, a move experts believe may be influenced by the Russia-Ukraine situation.
The most-active August gas contract on the New York Mercantile Exchange’s Henry Hub settled at $2.757 per mmBtu, marking a 5.9% increase or a rise of 15.4 cents.
The U.S. Energy Information Administration (EIA) reported that natural gas storage levels climbed by 41 billion cubic feet (bcf) during the week ending on July 14, closely aligning with the 40-bcf injection forecast by industry analysts tracked by Investing.com.
Although weather and other factors remained stable, market analysts pointed to the fallout from the Black Sea Grain Initiative’s collapse, following Russia’s withdrawal from the agreement, as a potential catalyst for the surge in U.S. gas prices.
Russian leader Vladimir Putin outlined his conditions for reinstating the deal, with the lifting of international sanctions on Russian fertilizer deliveries as a top priority. Gelber & Associates, an energy markets advisory firm based in Houston, explained, “If the demands are met, Russian gas supply will be drawn from as the country’s fertilizer.”
Meeting Putin’s demands could lead to a significant resurgence in the fertilizer industry, relying on Russian gas stockpiles—a bullish development that Gelber’s analysts believe coincided with the rally on the Henry Hub, coinciding with news of Russia’s demands over the Black Sea front.
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