Natural gas wholesale contracts rose sharply on Wednesday, as natural gas traders looked ahead to weekly storage data to gauge supply and demand levels.
Weather forecasts for the next 8-to-15 days showed that rain, snow, and cool temperatures will track across the northern and eastern U.S., boosting demand expectations for the heating fuel. At the same time, the southern half of the U.S. will be warmer than normal as high pressure dominates with highs reaching the 60s to 80s Fahrenheit.
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Natural gas for April delivery jumped 7.7 cents, or around 2.72% to $2.901 per million British thermal, nearing a three-week high of $2.952 touched on Monday. Meanwhile, natural gas traders continued to monitor shifting weather forecasts to gauge demand for the fuel.
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Prices of the heating fuel are down around 22% 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.
Without significant demand for natural gas, inventories could stay near record levels and may even continue to pull prices even lower.
See a recap of previous weeks EIA storage reports here.
EIA Natural Gas Storage Report 03-09-17
Working gas in storage was 2,295 Bcf as of Friday, March 3, 2017, according to EIA estimates. This represents a net decrease of 68 Bcf from the previous week. Stocks were 192 Bcf less than last year at this time and 363 Bcf above the five-year average of 1,932 Bcf. At 2,295 Bcf, total working gas is within the five-year historical range.
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Review a recap of previous weeks EIA Natural Gas inventory Reports.
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