Leading up to todays report, Natural gas prices closed at a three-week high on Tuesday, as forecasts for more-normal temperatures in the coming weeks boosted the outlook for demand. Forecasts for cooler temperatures have helped boost natural gas prices, after weeks of warmer-than-average weather have weighed on demand.
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Wholesale contracts for December delivery settled up 3.2 cents, or 1.1% at $2.9820 a million British thermal units on the New York Mercantile Exchange, the highest close since Oct. 31. Prices have risen in four of the past five sessions.
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Some analysts are indicating that the market transition into the winter season has helped support prices, as cold weather should lead to withdrawals from record high storage levels. “ Natural gas traders are also looking to storage numbers from the U.S. Energy Information Administration, scheduled for release on Wednesday, which will signal whether demand is impacting record inventory numbers. Trading activity will be muted for the shortened holiday week, analysts noted.
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Going forward, natural gas prices should depend largely on whether the winter season will lead to an uptick in demand, as natural gas is largely used to heat homes in the U.S., and prices rise with colder temperatures.
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See a recap of previous weeks EIA storage reports here.
EIA Natural Gas Storage Report 11-23-16
Working gas in storage was 4,045 Bcf as of Friday, November 18, 2016, according to EIA estimates. This represents a net decline of 2 Bcf from the previous week. Stocks were 39 Bcf higher than last year at this time and 241 Bcf above the five-year average of 3,804 Bcf. At 4,045 Bcf, total working gas is above the five-year historical range.
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Analysts expected a build of 3 bcf. As of 12:02 ET, natural gas futures were trading higher by 1.8% to $3.036.
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You can review a recap of previous weeks EIA Natural Gas inventory Reports.
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