US GAS: Futures Fall Ahead Of Gas Inventory Data
March 15 2012 - 9:47AM
Dow Jones News
Natural gas futures fell Thursday ahead of a weekly government
report that is expected to show below-average withdrawals from U.S.
gas inventories.
Natural gas for April delivery fell 4 cents, or 1.8%, to
recently trade at $2.244 a million British thermal units on the New
York Mercantile Exchange, flirting with fresh ten-year lows.
The U.S. Energy Information Administration is expected to report
a draw of 57 billion cubic feet from storage in the week ended
Friday, according to analysts average estimate in a Dow Jones
Newswires survey.
If the figure is correct, inventories as of March 9 will total
2.376 trillion cubic feet, 52% above the five-year average for this
time of year.
A mild winter has kept demand for gas-fired heating low, holding
down futures amid a supply glut in the U.S. Now, as the U.S. exits
the coldest part of the year, investors are concerned that
near-record inventories will keep pressure on prices.
"This dramatic supply overhang will be disturbed only slowly by
increased demand from the power sector and voluntary production
reductions," said Jim Ritterbusch, head of trading advisor
Ritterbusch and Associates. "We see a high probability of fresh
lows."
Mild weather is expected to continue for the next month,
according to a forecast Thursday from the National Oceanic and
Atmospheric Administration. And above-normal temperatures are seen
across much of the country through June.
"The super-warm pattern continues to dominate much of the U.S."
said Matt Rogers, President of forecaster Commodity Weather Group
in reference to the next week.
Without a drop in temperatures, analysts say that next week's
report could show the first injection of natural gas for the
year.
Natural gas for next-day delivery at the benchmark Henry Hub in
Louisiana recently traded at $2.0525/MMBtu, according to
IntercontinentalExchange, compared with Wednesday's average of
$2.131/MMBtu. Natural gas for next-day delivery at Transcontinental
Zone 6 in New York traded at $2.11/MMBtu, down from
$2.2169/MMBtu.
-By Jerry A. DiColo, Dow Jones Newswires; 212-416-2155;
jerry.dicolo@dowjones.com