Natural gas rose for a fourth day on speculations that this weeks EIA U.S. natural gas storage report will show a smaller than average increase in stockpiles. Warmer than usual weather through the end of the month boosted the power-stations demand prospects.
On the New York Mercantile Exchange, natural gas futures for delivery in October rose by 0.44% to $3.755 per million British thermal units at 14:22 GMT. Prices held in range between days high of $3.776 per mbtu, the strongest level since July 19, while days low was touched at $3.732. The fuel rose 1.6% on Monday, a third consecutive daily gain, extending its weekly advance to 2.2% following Tuesdays surge.
Gas continued to advance amid expectations for a smaller than the average increase in inventories last week. According to a Bloomberg survey of five analysts, U.S. gas stockpiles probably rose by 59 billion cubic feet in the week ended September 13, compared to a 61 billion gain in the comparable period a year ago. If confirmed, the build would be well below the five-year average increase of 74 billion cubic feet.
Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut, said for Bloomberg: “Traders are expecting a smaller-than-average storage injection and that’s been supportive for prices. The market continues to try to push higher.”
Gas surged more than 2% on Thursday following a bullish inventories report by the EIA. The agency said that U.S. natural gas stockpiles added 65 billion cubic feet in the week ended September 6, above the five-year average build of 62 billion. Stockpiles increased by 27 billion cubic feet in the comparable week a year earlier.
Total gas held in underground storage hubs now equaled 3 253 billion cubic feet, and were 172 billion, or 5%, below last year’s 3 425 billion. The surplus over the five-year average of 3.207 trillion cubic feet remained unchanged at 1.4% from the preceding week.
The fuel also drew support amid forecasts for warmer-than-usual weather in the U.S. According to MDA Weather Services in Gaithersburg, Maryland, most of the lower-48 states will experience above-average temperatures through the end of the month. DTN reported on September 17 warm temperatures in the Midwest and Northern Plains. According to AccuWeather Inc., the high in Houston on September 19 may be 91 degrees Fahrenheit, 3 above seasonal, while temperatures in Chicago may peak at 85 degrees, 11 above the average.
When warm weather is expected, natural gas surges as increased electricity demand to power air-conditioning calls for more supply of the fuel, which is used for a quarter of the U.S. electricity generation. Mild temperatures have the opposite effect. According to the Energy Information Administration, power generation accounts for 32% of U.S. gas demand.
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