Natural Gas softens, US active gas rigs up 2.4% on year

Natural Gas futures eased after a mini rally in last few sessions as elevated inventories and steady supplies outlook kept prices near six-month low. A 5% slide in crude oil prices in last session also weighed. Latest data from the US Energy Information Administration showed that working gas in underground storage across the Lower 48 states totaled 3,084 billion cubic feet (Bcf). This represents a net weekly increase of 28 Bcf compared to the prior week. Current inventories are 32 Bcf lower than the level recorded at the same time last year but stand 185 Bcf above the five-year average of 2,899 Bcf. The EIA noted that total working gas remains within the five-year historical range.

Meanwhile, the number of oil and gas rigs actively drilling in the US rose by 1 to 588, marking its 13th gain in the past 15 weeks, Baker Hughes said Friday in its latest weekly survey. The total rig count was up 48, or 8.9%, compared to the same time last year, while the number of rigs drilling for oil rose by 41, or 10%, from a year ago, and gas rigs were up by 3, or 2.4%, from a year earlier. This is likely to keep the gas output trajectory fairly steady.

The benchmark Natural Gas futures are currently trading at $2.76 per mmbtu, down 0.76% on the day after gaining more than 1% in last session. MCX Natural Gas futures are up marginally at Rs 265 per mmbtu.

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