Natural gas futures extended daily losses, after a government report showed today that US gas stockpiles fell less than projected last week. However, losses were held in check as weather forecasting models called for below-normal temperatures across many densely populated US areas, stoking demand for the power-station fuel.
On the New York Mercantile Exchange, natural gas for delivery in April traded at $4.382 per million British thermal units at 14:49 GMT, down 2.27% on the day. Prices held in a daily range between $4.473 and $4.359 per mBtu. The contract fell to a seven-week low of $4.341 on March 14 and settled last week 4.4% lower.
EIA’s weekly US gas storage report
The Energy Information Administration reported today that US natural gas inventories fell by 48 billion cubic feet in the seven days through March 14th, less than analysts’ median forecast of a 58 billion cubic feet drop and compared to a withdrawal of 74 billion cubic feet the same week a year ago. However, the decline exceeded the five-year average drop of 30 bcf during the comparable period.
Total gas held in US underground storage hubs fell to a 10-year seasonal low of 953 billion cubic feet. US gas stockpiles were 49.4% below last year’s amount of 1.885 trillion cubic feet during the comparable week. The deficit to the five-year average widened to a record 47.9%, up from 46.2% a week earlier.
Inventories at the East Region received a net withdrawal of 35 bcf and fell to 395 bcf, 50.3% below the five-year average of 794 billion cubic feet. Stockpiles in the West Region fell by 2 bcf to 167 bcf and were 43% beneath the average. Inventories at the Producing Region slid by 11 bcf. At 391 bcf, they were 47.3% below the five-year average amount of 742 billion cubic feet.
US weather outlook
A modest weather system continues to sweep across New England, leaving a mixed bag of precipitation, NatGasWeather.com reported on March 20.
Friday and Saturday are expected to bring a quick warm up before a fairly impressive cold front develops over the northern US and pushes fairly deep into the central US, remaining in place from March 23rd through March 27th.
Unseasonably strong natural gas and heating demand can be expected, as the cold front will lead to temperature anomalies of 15-30 °F colder-than-normal across many US regions.
According to AccuWeather.com, temperatures in Chicago will fall to as much as 20 degrees Fahrenheit on March 25th, 14 degrees below average, same as in Boston where the low will be 22 degrees Fahrenheit, 13 below normal. Readings in Detroit will bottom at 20 degrees Fahrenheit, compared to the average of 32 degrees.
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