Natural gas wholesale contracts edged higher on Wednesday, regaining strength after falling to the lowest level in around six months as forecasts called for mostly warmer-than-normal weather in key regions across the U.S. for the rest of the winter.
The more actively-traded April contract rose 2.9 cents, or 1.1%, to $2.720, after sliding to $2.641 earlier.
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Natural gas for March delivery on the New York Mercantile Exchange sank to a session low of $2.522 per million British thermal units, a level not seen since in six months.It settled at $2.592, up 2.8 cents, or around 1.2%, after sinking 27.0 cents, or 9.5%, a day earlier.
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Prices of the heating fuel are down a whopping 30% so far this year as forecasts for warm winter weather weighed on heating demand expectations. Based on data from the National Oceanographic and Atmospheric Administration, this year’s extremely warm winter has pushed heating demand for natural gas to nearly 20% below average. 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 02-23-17
Working gas in storage was 2,356 Bcf as of Friday, February 17, 2017, according to EIA estimates. This represents a net decrease of 89 Bcf from the previous week. Stocks were 261 Bcf less than last year at this time and 156 Bcf above the five-year average of 2,200 Bcf. At 2,356 Bcf, total working gas is within the five-year historical range.
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Analysts estimated that utilities pulled 85 billion cubic feet of gas from storage during the week ended Feb. 17, the least since 2011, according to a Reuters poll. As of 10:32 ET, natural gas futures were trading higher by 1.9% to $2.642.
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