posteriori/E+ via Getty Images
U.S. natural gas futures reversed earlier losses to close more than 5% higher Tuesday, as analysts cited short covering after prices had tumbled to their lowest in a month.
Front-month Nymex natural gas (NG1:COM) for April delivery closed +5.6% to $2.348/MMBtu, after earlier falling more than 3% to its lowest level since February 23.
ETFs: (NYSEARCA:UNG), (UGAZF), (BOIL), (KOLD), (UNL), (FCG)
Top natural gas producers finished broadly higher, including Range Resources (NYSE:RRC) +4.6%, SilverBow Resources (SBOW) +4%, Southwestern Energy (SWN) +3.3%, EQT Corp. (EQT) +2.8%, Antero Resources (AR) +2.6%, Coterra Energy (CTRA) +2.3%.
Traders’ attempts to push prices towards $2.00 caused short covering because there were not enough bearish factors to justify such a drastic slide, Robert DiDona of Energy Ventures Analysis said, according to Reuters.
DiDona expects to “find some bid side interest here in short-term given the weather outlook… and what should be better LNG demand in the upcoming weeks.”
Analysts at energy consultant Ritterbusch and Associates said they “still see significant price support further down the curve with Europe likely to be a strong buyer later in the summer amid some tank topping ahead of the winter as Russian supply availability will be negligible in relation to past years.”
Range Resources (RRC) also was helped by Tudor Pickering Holt’s upgrade to Buy, citing valuation after the stock’s recent 18% plunge over two weeks.
