Natural gas futures declined on Tuesday, as weather forecasting models called for a springlike weather across many densely populated US areas, curbing demand for the power-station fuel.
On the New York Mercantile Exchange, natural gas for delivery in April traded at $4.506 per million British thermal units at 10:06 GMT, down 0.67% on the day. Prices held in a daily range between $4.548 and $4.503 per mBtu. The contract jumped by nearly 1% on Friday after it earlier fell to a seven-week low of $4.341, but settled the week 4.4% lower.
The eastern US will see a decent warm up today, NatGasWeather.com reported, significantly easing natural gas and heating demand over much of the country. However, another weather system will sweep across the northern US on Wednesday and Thursday, carrying light precipitation and low temperatures. Friday and Saturday are expected to bring a quick warm up before an impressive cold front enters the eastern and northern US, pushing temperatures across the Midwest and Northeast’s highest-use states below the average for the next full week.
According to AccuWeather.com, temperatures in New York will fall to as much as 38 degrees Fahrenheit on March 22nd, 2 degrees above average, same as in Boston where the low will be 35 degrees Fahrenheit, 2 above normal. Readings in Cleveland will bottom at 35 degrees Fahrenheit, compared to the average of 30 degrees.
US inventories levels
Natural gas prices plunged nearly 2.4% last Thursday after the Energy Information Administration reported US natural gas inventories fell by 195 billion cubic feet in the seven days through March 7th, less than analysts’ median forecast of a 199 billion cubic feet drop and compared to a withdrawal of 145 billion cubic feet the same week a year ago. However, the decline was more than double the five-year average drop of 95 bcf during the comparable period.
Total gas held in US underground storage hubs fell to a 10-year seasonal low of 1.001 trillion cubic feet. US gas stockpiles were 48.9% below last year’s amount of 1.959 trillion cubic feet during the comparable week. The deficit to the five-year average widened to a record 46.2%, up from 38.8% a week earlier.
Inventories at the East Region received a net withdrawal of 95 bcf and fell to 430 bcf, 47.9% below the five-year average of 825 billion cubic feet. Stockpiles in the West Region fell by 21 bcf to 169 bcf and were 42.9% beneath the average. Inventories at the Producing Region slid by 79 bcf. At 402 bcf, they were 45.5% below the five-year average amount of 737 billion cubic feet.
Data by the US Commodities Futures Trading Commission showed on Friday that hedge funds and money managers reduced their net-long positions in natural gas futures in the week ended March 11 to 149 267 contracts, down 1.9% from the preceding week’s 152 182 contracts.
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