Natural gas clung on to gains on Thursday after the Energy Information Administration reported a larger-than-expected decline in US gas inventories, adding to bullish sentiment fanned by weather forecasts for a colder end to the year.
On the New York Mercantile Exchange, natural gas for delivery in January was up 1.35% at $3.752 per million British thermal units at 15:42 GMT, having shifted in a daily range between $3.805 and $3.665 per mBtu. The energy source settled 2.29% higher at $3.702 on Wednesday, snapping a two-day loss streak.
The Energy Information Administration said in a report that US natural gas stockpiles fell by 64 billion cubic feet (bcf) in the week ended December 12th, exceeding analysts projections for a withdrawal of 57-63 bcf but also falling well behind the five-year average drop of 157 bcf.
Total gas held in US storage hubs amounted to 3.295 trillion cubic feet as of December 12th, scoring a 0.2% surplus to last years level of 3.289 trillion during the comparable period, but also widening its deficit to the five-year average of 3.553 trillion to 7.3%.
The East Region saw a net withdrawal of 55 bcf to 1.725 trillion and was 8.6% below the average. Inventories in the West Region rose by 1 bcf to 471 bcf and were at a deficit of 2.7% to the average, while stockpiles in the Producing Region fell by 10 bcf to 1.099 trillion and trailed the average by 7.0%.
US weather
Expectations for a chilly end to the year gave the market additional strength. According to NatGasWeather.com, US natural gas demand will be moderate, compared to normal, through December 24th, with a colder weather trend for the following seven days.
Several additional Pacific weather systems will move through the southern US during the weekend with rain accompanied by readings slightly below normal. Another weather system will develop over Texas tomorrow, carrying heavy showers and eventually flowing into the Southeast.
A powerful winter storm with snow accumulations and very strong winds is projected to form over the the central and eastern US by Christmas Eve, NatGasWeather.com reported.
Another strong winter storm is expected to bring sub-freezing temperatures late next week over the Great Lakes and Northeast. An even more significant cold blast will follow on Christmas Day and push freezing temperatures deep into the south-central US.
Southwest and northeast corners excluded, the US will be affected by below-normal temperatures for the rest of the year.
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