Natural gas futures declined on Friday, as weather forecasting models called for springlike weather to return in many densely-populated US areas by the end of next week, curbing demand for the power-station fuel.
On the New York Mercantile Exchange, natural gas for delivery in May traded at $4.413 per million British thermal units at 09:39 GMT, down 1.28% on the day. Prices held in a daily range between $4.4460, and $4.405 per mBtu. Yesterday, the energy source added 1.5%, after a government report showed much-larger-than the five-year average inventory drop.
EIAs weekly US gas storage report
The Energy Information Administration reported yesterday that US natural gas inventories fell by 74 billion cubic feet in the seven days through March 28th, in line with the median of 11 analyst estimates in a Bloomberg News survey. The decline was more than 9 times larger than the five-year average drop of 8 bcf during the comparable period.
Total gas held in US underground storage hubs fell to an 11-year seasonal low of 822 billion cubic feet. US gas stockpiles were 51.6% below last year’s amount of 1.700 trillion cubic feet during the comparable week. The deficit to the five-year average widened to a record 54.7%, up from 50.8% a week earlier.
Inventories at the East Region received a net withdrawal of 46 bcf and fell to 310 bcf, 59.1% below the five-year average of 758 billion cubic feet. Stockpiles in the West Region fell by 4 bcf to 160 bcf and were 45.6% beneath the average. Inventories at the Producing Region slid by 24 bcf. At 352 bcf, they were 53.8% below the five-year average amount of 762 billion cubic feet.
US weather outlook
Another fairly strong spring storm will be tracking slowly across the central US with increasing showers and thunderstorms in the warm sector and some heavy snowfall into portions of the Midwest and Great Lakes, NatGasWeather.com reported on April 3.
After the storm retreats on Friday, cool conditions will set up through the weekend, before another surge of milder conditions returns back early next week.
There is an increasing probability that another fairly strong spring storm develops by the middle of next week, with the potential to bring some very chilly Canadian air and push as deep as the southern US.
However, the website reported that after April 11th much milder temperatures will push into many US regions, significantly easing natural gas and heating demand.
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