Natural gas fell a second day on Tuesday as long-term weather forecasts called for a period of milder conditions over many densely-populated US areas.
On the New York Mercantile Exchange, natural gas for delivery in February declined by 0.34% to trade at $4.312 per million British thermal units by 09:49 GMT. Prices hit a session high at $4.319 per mBtu, while day’s low was touched at $4.290 per mBtu.
Last week, the energy source surged by 5.4%, after losing 5.7% in the previous 5-day period. Prices settled last year 26% higher, the best performance since 2005 and second straight annual advance.
Short-term weather outlook
NatGasWeather.com reported on January 21st that a series of Canadian Clippers will bring another round of cold temperatures and snowfall for the Midwest and Northeast. The weather system will leave several inches of snow, as it tracks toward the New England coast, where it will bring heavier snowfall. Another cold blast may follow on Wednesday into Thursday and will most probably push much deeper into the southern Plains, bringing freezing temperatures deep into Texas.
According to the website, during the week, moderate to high natural gas and heating demand can be expected. During the coming weekend, a much colder Arctic air mass may impact the Northeastern US, with temperatures falling again below zero for parts of the Midwest and New England and single digits and teens for the Mid-Atlantic. However, the cold blast will leave only a few inches of snow.
Extended weather forecast
The long-term weather outlook pointed to a period of relatively calm conditions across much of the US. NatGasWeather.com’s forecast for the week ended February 5th called for a big pattern change to take place by February 1st, as a much more active jet stream will attempt to bring Pacific storms to the West coast. The latter will limit the amount of very cold air that is able to push into the central US and will thus ease natural gas demand, by limiting the regions which will experience below-normal temperatures to the Great Lakes, Mid-Atlantic, and Northeast.
By the end of the month, a west to east flow will probably set up across the US, bringing fairly active weather pattern, with numerous winter storms impacting much of the country. On one hand, there will still be areas of moderate to heavy rains and snows, while on the other hand it will be a bit milder for the central and eastern US.
According to AccuWeather.com, temperatures in Boston on January 30th may bottom at 32 degrees Fahrenheit, 10 above average, while the low in Columbus may hit 31 degrees, above the average of 23 degrees. Temperatures in New York are expected to reach 29 degrees Fahrenheit, 4 above normal.
US gas inventories level
The Energy Information Administration (EIA)reported on Thursday, that US natural gas stockpiles fell by less than expected in the seven days through January 10th, despite the withdrawal being the largest on record. US gas supplies fell by 287 billion cubic feet, trailing analysts’ projections for a decrease of 303 billion cubic feet, but was almost double the five-year average decline of 159 billion cubic feet.
Total gas held in underground storage hubs equaled 2.530 trillion cubic feet as of January 10th, 20.7% below last year’s 3.189 trillion stored. The deficit to the five-year average widened to a record 14.9% from the preceding week’s 10.1%.
Inventories in the East Region fell by 149 bcf to 1.254 trillion and were 18.9% below the five-year average of 1.546 trillion cubic feet. The West Region received a net draw of 31 bcf to 364 bcf, 11.2% below the average. Stockpiles in the Producing Region slid by 107 billion cubic feet and reached 912 bcf, 10.2% beneath the five-year average of 1.016 trillion cubic feet.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
