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Natural Gas gains on weather forecasts for a chilly start to spring

Published 03/19/2013, 02:19 PM
Updated 03/19/2013, 02:21 PM
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Investing.com - Natural gas futures rose on Tuesday after weather forecasting models predicted the first day of spring in the Northern Hemisphere would come and go with cooler-than-normal temperatures remaining firmly in place for much of the eastern half of the U.S.

On the New York Mercantile Exchange, natural gas futures for delivery in April traded at USD3.958 per million British thermal units, up 1.97%.

The commodity hit a session low of USD3.870 and a high of USD3.971.

The Commodity Weather Group LLC revealed earlier that temperatures will remain below normal for much of the U.S. over the next 10 days, while the eastern half of the country will remain on the cooler side through early April.

Other forecasting models made similar predictions, which sparked a rally in natural gas markets.

The heating season from November through March is the peak demand period for U.S. gas consumption. Nearly 50% of all U.S. households use gas for heating.

Meanwhile, markets are starting to brace for this week's stockpile data.

The U.S. Energy Information Administration said in its report last week that natural gas storage in the U.S. in the week ended March 8 fell by 145 billion cubic feet, compared to expectations for a drop of 134 billion cubic feet.

Inventories fell by 66 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 74 billion cubic feet.

Total U.S. natural gas storage stood at 1.938 trillion cubic feet as of last week. Stocks were 440 billion cubic feet less than last year at this time and 198 billion cubic feet above the five-year average of 1.740 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 38 billion cubic feet above the five-year average, following net withdrawals of 92 billion cubic feet.

Stocks in the Producing Region were 85 billion cubic feet above the five-year average of 684 billion cubic feet after a net withdrawal of 48 billion cubic feet.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in May were down 1.46% and trading at USD92.74 a barrel, while heating oil futures for April delivery were down 1.97% and trading at USD2.8691 per gallon.







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