Natural gas futures advanced on Tuesday as weather forecasting models continued to call for below-normal temperatures across many densely populated US areas, spurring demand for the power-station fuel.
On the New York Mercantile Exchange, natural gas for delivery in April traded at $4.304 per million British thermal units at 10:04 GMT, up 0.74% on the day. Prices held in a daily range between $4.306 and $4.274 per mBtu. However, the contract registered a second weekly decline and settled last 5-day period 2.4% lower, after losing 4.4% in the previous week.
US weather outlook
Cold air will remain anchored over the highest-consumption states of the northern US in the next few days, NatGasWeather.com reported on March 25.
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. The Great Lakes and Northeast will experience moderate snowfall Tuesday into Wednesday, followed by a quick warm surge, which will push deep into the eastern US, Friday into Saturday. However, a couple of days of below-normal temperatures will close out the month.
According to AccuWeather.com, temperatures in Chicago will fall to as much as 26 degrees Fahrenheit on March 29th, 9 degrees below average, same as in Cleveland where the low will be 23 degrees Fahrenheit, 12 below normal. Readings in Detroit will bottom at 22 degrees Fahrenheit, compared to the average of 33 degrees.
EIA’s weekly US gas storage report
The Energy Information Administration reported on Thursday 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.
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