Natural gas futures declined for a third day on Tuesday, as forecasts for warmer weather in the US reduced demand for the power-station fuel.
On the New York Mercantile Exchange, natural gas for delivery in May traded at $4.368 per million British thermal units at 11:47 GMT, down 0.08% on the day. Prices held in a daily range between $4.389, and $4.343 per mBtu. The contract snapped two weeks of declines, as it added 4% last week, following a bullish government gas storage report.
US weather outlook
While one spring storm moves out of the Great Lakes with lingering snowfall, a new one will be spinning up over the central Plains and sweeping through the eastern US over the next few days, NatGasWeather.com reported on April 1. The latter will bring a surge of milder temperatures into the eastern US over the next few days, significantly easing natural gas and heating demand.
After several days of milder conditions over the Midwest and Northeast, chilly temperatures will return Wednesday into Thursday, but the cool down will be brief as late in the week, another fairly strong storm develops and tracks across the central US and the Northeast, bringing above-average temperatures.
According to AccuWeather.com, temperatures in Boston will fall to as much as 41 degrees Fahrenheit on April 9th, 2 degrees above average, same as in New York where the low will be 44 degrees Fahrenheit, 2 above normal. Readings in Detroit will bottom at 39 degrees Fahrenheit, compared to the average of 37 degrees.
US gas inventories levels
The Energy Information Administration reported on Thursday that US natural gas inventories fell by 57 billion cubic feet in the seven days through March 21st, more than analysts’ median forecast of a 52 billion cubic feet drop and compared to a withdrawal of 90 billion cubic feet the same week a year ago. However, the decline was more than 8 times larger than the five-year average drop of 7 bcf during the comparable period.
Total gas held in US underground storage hubs fell to a 11-year seasonal low of 896 billion cubic feet. US gas stockpiles were 50.1% below last year’s amount of 1.795 trillion cubic feet during the comparable week. The deficit to the five-year average widened to a record 50.8%, up from 47.9% a week earlier.
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