Natural gas wholesale contracts pushed higher on Wednesday, bouncing back from heavy losses in the prior session as forecasts showing cooler weather on the way boosted the heating fuel.
Snow showers and gusty winds remain in the wake of Tuesday’s powerful winter storm that brought a wintry mess to the Mid-Atlantic and Northeast, according to forecasters at NatGasWeather.com.
Temperatures are expected to remain much colder than normal through the end of the week, with highs struggling to reach the 30s, while overnight lows drop into the teens to below 0F.
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Natural gas for April delivery rose 4.3 cents, or around 1.6% to $2.981 per million British thermal. Prices of the heating fuel sank 10.5 cents, or about 3.5%, on Tuesday.
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Prices of the heating fuel are down around 20% 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.
A fast-moving weather system will then impact the east-central U.S. Saturday into Sunday, followed by warming Monday, but again cooling off mid-week.
See a recap of previous weeks EIA storage reports here.
EIA Natural Gas Storage Report 03-16-17
Working gas in storage was 2,242 Bcf as of Friday, March 10, 2017, according to EIA estimates. This represents a net decrease of 53 Bcf from the previous week. Stocks were 236 Bcf less than last year at this time and 395 Bcf above the five-year average of 1,847 Bcf. At 2,242 Bcf, total working gas is within the five-year historical range.
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U.S. utilities were expected to have pulled 56 billion cubic feet of natural gas from storage during the week ended March 10 as warmer-than-normal weather resulted in subdued heating demand. As of 10:32 ET, natural gas futures were trading lower by 1.9% to $2.927.
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