Leading up to today's report, Natural gas wholesale contracts declined for the second day in a row on Wednesday, falling toward a one-week low as weather forecasts for the end of January turned warmer, which should dampen demand for the heating fuel.
Weather models initially predicted colder temperatures throughout most parts of the U.S. during the period.
Natural gas for February delivery on the New York Mercantile Exchange dropped nearly 3% to a session low of $3.302 per million British thermal units, a level not seen since January 12. The February wholesale contract was lower by $0.11 on the day as natural gas traders sold contracts despite the large storage withdrawal forecasted for Thursday.
Natural gas markets have been volatile in recent weeks, changing course rapidly in response to shifting outlooks in short-term weather patterns. Natural gas prices typically rise during the winter as colder weather sparks indoor-heating demand. About half of U.S. homes use natural gas for heating.
See a recap of previous weeks EIA storage reports here.
EIA Natural Gas Storage Report 01-19-17
Working gas in storage was 2,917 Bcf as of Friday, January 13, 2017, according to EIA estimates. This represents a net decline of 243 Bcf from the previous week. Stocks were 431 Bcf less than last year at this time and 77 Bcf below the five-year average of 2,994 Bcf. At 2,917 Bcf, total working gas is within the five-year historical range.
Analysts estimated utilities pulled 229 billion cubic feet of gas from storage during the week ended on Jan. 13. As of 10:31 ET, natural gas futures were trading lower by 0.4% to $3.289.
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Review a recap of previous weeks EIA Natural Gas inventory Reports.
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