The Zhitong Finance App learned that US gas futures fell on Thursday, although a moderately optimistic inventory report showed that the increase in US inventories was below average last week.

The US Energy Information Administration (EIA) reports that in the week ending May 17, natural gas inventories increased by 78 billion cubic feet, lower than market expectations of 84 billion cubic feet; total reserves are 29% higher than the five-year average.

Analysts at Ritterbusch believe that the sell-off is a reaction to the overbought market and may be the end of some speculative profit.

On Thursday, the New York Mercantile Exchange's recent gas contract for June delivery closed down 6.5% to 2.657 US dollars/million British thermal units, but it is still up 33% so far this year.

Citigroup analysts said this week that before summer weather becomes brighter, the rise in US gas futures may be brief and may return to $2.50 per million British thermal units.

The bank attributed this month's rise in natural gas prices to lower production, higher liquefied natural gas exports, lower than expected recent inventory growth, falling mid-term storage forecasts, and shortfall recovery, but the bank said production could begin to recover in early June or earlier.

“We recommend staying neutral at current price levels and shorting when there are clear signs of a rebound in US production,” Citi said.

However, law firm Haynes and Boone LLP bucked the trend and is bullish on US natural gas. The agency expects US gas prices to reach the $3 mark as early as next year as power-intensive data centers drive demand for fuel for power plants.