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Natural gas prices gain on shifting weather forecasts

Published 02/04/2013, 02:22 PM
Updated 02/04/2013, 02:23 PM
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Investing.com - Natural gas futures rose on Monday after weather forecasts calling for a return of warming temperatures began to disagree on the timing of such an event.

On the New York Mercantile Exchange, natural gas futures for delivery in March traded at USD3.318 per million British thermal units, up 0.53%.

The commodity hit a session low of USD3.260 and a high of USD3.353.

Weather forecasts recently agreed that a cold snap gripping much of the central and eastern portions of the U.S. will thaw and give way to rising temperatures, though on Monday, forecasts models offered different accounts as to the timing of such a scenario.

Still, gains were muted as warmer weather will return in the coming days.

Elsewhere, gains were muted after the U.S. Energy Information Administration said in its most recent weekly report that natural gas storage in the U.S. in the week ended Jan. 25 fell by 194 billion cubic feet, less than expectations for a drop of 206 billion cubic feet.

Inventories fell by 149 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 178 billion cubic feet.

Total U.S. natural gas storage stood at 2.802 trillion cubic feet as of last week. Stocks were 202 billion cubic feet less than last year at this time and 304 billion cubic feet above the five-year average of 2.498 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 102 billion cubic feet above the five-year average, following net withdrawals of 129 billion cubic feet.

Stocks in the Producing Region were 153 billion cubic feet above the five-year average of 860 billion cubic feet after a net withdrawal of 47 billion cubic feet.

Meanwhile, natural gas traders continued to closely track weather forecasts for the next few weeks in an attempt to gauge the strength of winter heating demand.

Weather services continued to call for a warming trend to settle in for much of the central and eastern reaches of the country.

Natural gas futures are very sensitive to weather reports in the U.S. winter.

The U.S. heating season running from November through March sees peak demand for gas.

About half of U.S. households use gas for heating purposes, according to Energy Department data.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March were down 1.80% and trading at USD96.01 a barrel, while heating oil for March delivery were down 0.30% and trading at USD3.1510 per gallon.








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