Natural gas wholesale contracts fell for the first time in four sessions on Wednesday, pulling back from the strongest level since February as traders continued to monitor shifting early-spring weather forecasts.
Warm to mild conditions will dominate most of the U.S. this weekend, even as a spring-like weather system with heavy showers and thunderstorms impacts the central U.S.
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Natural gas contracts for April delivery dropped 8.2 cents, or around 2.72% to $3.011 per million British thermal. It settled higher for the third session in a row on Tuesday after hitting its strongest since February 9 at $3.113.
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Next week will be mostly mild to warm across the country with limited demand for heating or cooling besides the far northern U.S., according to forecasters at NatGasWeather.com. Prices of the heating fuel are down around 18% 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 03-23-17
Working gas in storage was 2,092 Bcf as of Friday, March 17, 2017, according to EIA estimates. This represents a net decrease of 150 Bcf from the previous week. Stocks were 399 Bcf less than last year at this time and 266 Bcf above the five-year average of 1,826 Bcf. At 2,092 Bcf, total working gas is within the five-year historical range.
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Analysts said utilities likely pulled 150 billion cubic feet of gas from storage during the cold week ended on March 17. As of 10:32 ET, natural gas futures were trading higher by 0.4% to $3.023.
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